Many responsibilities are associated with rental property ownership. A property lending specialist from Maxfunding says, “Rental property ownership includes responsibilities like interviewing prospective tenants, collecting rent receipts, responding to emergency calls for help, cleaning and turning space over in properties for prospective renters, initiating and filing eviction proceedings, and more. If you have a full-time job along with being a landlord, it can be quite overwhelming to handle all of those duties.”
She adds, “The solution to this problem is to hire a professional and experienced property management company to help you.”
Property Management: The Secret of Real Estate Tycoons
Property management companies provide you with the necessary operational support that you need for your rental properties. The company has an entire team of knowledgeable professionals when it comes to the various aspects that are involved in the management of the rental property. That reduces your responsibility from collecting rent to earning an income.
They Will Find Higher Quality Tenants
Tenant screening can be viewed as the drawbridge and moat surrounding your castle. It is possible to evict a bad tenant from your house after they are in. However, it is a big hassle and it is much better to never accept them as tenants in the first place. Using a thorough screening process will help to provide you with reliable tenants who:
- Rent for a longer period
- Pay their rent on time
- Exert less wear and tear on the property
- Cause fewer problems in general
An experienced and skilled property management company will have reviewed thousands of applications and will know how to dig quickly for the facts about prospective candidates. They analyse the information for any potential problem, like rental scams, discrimination lawsuits.
Fewer Time-consuming and Expensive Legal Issues
Experienced landlords know it takes just one bad tenant to cause considerable financial and legal problems. Good property managers are knowledgeable about the most recent landlord-tenant laws and help to ensure that you are not left vulnerable to potential lawsuits.
Each municipality and state have their laws. Also, federal law covers many areas, which include but are not limited to the following:
- Rent collection
- Handling security deposits
- Terminating leases
- Lease addendums
- Safe property conditions
- Tenant screening
Keep Shorter Vacancy Cycles
There are three critical tasks that your property manager can do that affect the amount of time it takes to get your vacancies filled.
- Prepare and improve your property to rent: Your property manager can recommend and supervise aesthetic improvements to your property that can attract more potential tenants and maximise revenue.
- Determine the best rental rates: If you set them too high you could be stuck waiting for a tenant; if you set them too low then you will lose money each month. To determine the optimal rental rate requires being knowledgeable about the local market, having access to professional rental rate tools, and being informed on recently sold comparable properties.
- Market your property effectively: Experienced property management companies have written hundreds of advertisements and know what to say and the best places to advertise to get a bigger pool of candidates quickly. Also, due to their volume, normally they can negotiate less expensive advertising rates offline and online. Finally, they are very familiar with the sales process and know how to close whenever they are fielding prospect calls and take them to showings.
Improved Tenant Retention
Although seeing the effects associated with lost rent are easy, other problems are just as serious when you have a high tenant turnover rate. Your turnover process involves having to change the locks, thoroughly clean the unit, paint the walls, small repairs, and potentially new carpets, along with all of the efforts involved in advertising, showing the property, screening prospective tenants, and getting a new tenant settled. It is a costly and time-consuming process that often can be avoided if you take good care of present tenants.
An Improved Rent Collection Process
How you manage to collect rent as well as late payment can mean the difference between succeeding and failing as a landlord. To maintain consistent and reliable cash flow, you must have an effective rent collection process.
Your tenants must understand it is not negotiable. When you hire a property manager, it places a buffer in between the tenant and you. They act as the bad guy who chases down rent, listens to excuses, and evicts the people living on your property if necessary.
Property managers hold an advantage since tenants know that, in contrast to the owner, they are simply doing their job and are responsible for enforcing the terms of the lease. For this reason, many property managers say that managing the units of other people is a lot easier than handling their own.
They Can Help With Taxes
Your property management company can explain to you which deductions can be claimed and help you organise the documentation and forms that are necessary for making these claims.
Also, your property management fees are tax-deductible.
Lower Repair and Maintenance Expenses
When you hire a management company you get access to the firm’s in-house maintenance staff, along with their network of insured, bonded, and licensed contractors who have been vetted already for providing quality work and good pricing. That can help save you a lot of money compared to having to look for and hire a handyman on your own. Property firms can not only get volume discounts on work, but they are also capable of supervising the work effectively.
Increase your investment’s value
Effective preventative maintenance can be achieved by setting up systems to detect and deal with repair and maintenance issues early on in the process before they end up becoming more expensive and larger problems. You need a written maintenance check plan, regular maintenance visits, and detailed maintenance documentation. Your property management company also can provide you with feedback and suggestions on modifications and upgrades, which both affect the amount of rent that can be charged, and also impact insurance and maintenance.
This is, of course, the ideal scenario. You can only expect to achieve these results if you have a trustworthy and competent management company that is suitable for your property.