In the real estate business, property management companies can be a huge asset, but they won’t come cheap. It’s therefore important to consider the reasons why you want or need one, to determine if it’s really the right move to make for your business.
What’s a Property Management Company?
Property management companies or firms essentially deal with the tenants or prospects on behalf of the property owners. This saves you a lot of time, work, and worry over the tasks involved in managing properties such as collecting rent, marketing your rentals, handling repair and maintenance issues, pursuing evictions, or responding to tenant’s complaints.
A good property management company will also bring its knowledge and experience in the real estate industry to your property, giving you the much-needed peace of mind that comes when you know that your investment is in good, capable hands. Property management companies are also independent contractors, meaning that you won’t have to deal with the hassle of being an employer.
When to Hire a Property Management Company
While hiring a property management company comes with many perks, it can be expensive. And aside from the added costs, having to rely on a property management company to run your business is not for everyone. Below are some of the scenarios where you need a property management firm.
- You have many Properties or Rental Units to Run: This is rather straightforward, the more the rental properties you own, and the more the units these contain, the more you are likely to benefit from hiring a property management company.
- You live far away from your properties: If the properties you need to manage are located across the country or just far off where you live, a property management firm will provide invaluable help in dealing with the many potential issues that you will not be able to handle from afar.
- You’re having trouble setting rental rates or dealing with vacancies: Although checking the local classified to find out what other landlords are charging for units similar to yours is a great way to determine the rent price, a reputable property management firm will be able to conduct a thorough market research to set an effective rent for the units. This will ensure that you strike a great balance between keeping a minimal vacancy rate and maximizing your monthly income.
- The cost is affordable to you: Hiring a property manager will only be attractive or viable if you can be able to pay the fees they charge. Expect the firms to quote fees ranging from 5 to 10 percent of your rental revenue.
Reasons To Hire a Property Management Firm
Timely Rent Collection
For those who’ve worked in the real estate business before, you do understand how difficult securing payments from some tenants is, not to mention awkward at times. Property management companies typically have efficient systems in place that they use to ensure on-time rent collection. This will be particularly important if you have a small number of properties, since an on-time collection will be crucial to maintain cash flow.
Better Tenant Screening
Property owners often struggle to find high quality tenants, even when they have hundreds of applications when the market is hot. Trained professionals will use their knowledge and expertise to screen for the high quality ones and take care of the details such as running credit reports, conducting security checks, securing the criminal backgrounds, collecting previous landlord references, and verifying employment. This will go a long way in minimizing your vacancy rates and improving your revenue in the long run.
Advertising your Property
A property manager is also better equipped to market and advertise your property to the right audience. They have access to many different channels, and have the experience of crafting compelling marketing materials, which will be an added advantage when it comes to reducing your vacancy rates and filling up your properties quickly.
Managing Tenants Professionally
Aside from screening tenants to find the high-quality ones, the Ohio property managers will also handle all of the critical aspects of maintaining a good tenant/landlord relationship. Keep in mind that great customer service is a really important aspect of having a profitable real estate business. The property manager should be able to handle emergency and routine maintenance, manage any situations where conflict needs to be resolves, and take care of the routine inspections to your property.
Moreover, if you choose not to get a property management firms and hire a resident manager and other employees, you ideally become an employer. This means that you will have to deal with a whole list of legal considerations and requirements. However, since the firm is an independent contractor, not your employee, you avoid the hassles of being an employer.
Ensures Compliance with Property and Housing Laws
When renting out and maintaining your rental property, there are a number of applicable laws and regulations that you need to adhere to. These include federal, state, and municipal regulations, along with the fair housing laws. The firm will help to prevent conflict with the law by ensuring your property is always in compliance and updated with the various regulations.
In case your property is part of an affordable housing program, things might get a bit complicated. In such programs, the landlord usually receives some financial assistance in the form of tax credits, a low interest loan, or a grant in exchange for agreeing to rent to tenants that whose income is below a certain level. The property management firm with experience handling the rules involved will handle all this for you.
Better Management of Vendors
Property management firms usually have close relationships with different tradesmen, maintenance workers, contractors, vendors, and suppliers that an independent landlord simply can’t match. Your property manager will not only get you the best quality work at good rates, but also oversee any installation, repair, and maintenance projects on your behalf.
Let’s you Focus on Other Things
Once you’re comfortable that the day-to-day tasks of running your property business are in good hands, you are free to spend your time on your other engagements, such as furthering your career or identifying other lucrative investment opportunities.