Benefits of Using a Property Management Company

Many experienced real estate investors will tell you that a good management company is worth their weight in gold; this is because a competent property manager can add significant value to your investment.  This article presents an ideal scenario, which can only be expected if a management company is competent, trustworthy and a good fit for your property. On the other hand, a poor choice of a management company can produce many headaches of its own.

Here are some benefits you will get if you hire a reputable property manager:

Higher Quality Tenants

This is one of the most significant benefits a property management company will provide.Reliable tenants pay on time, rent longer, put less wear and tear on the unit and in generalcause less problems. Sadly, once a bad tenant is in your property, it is possible to have himget out of your home, but it’s a real hassle. You are so much better off never accepting himin the first place. A thorough screening process results in avoiding this trouble. Such process takes time, insomuch as it means avoiding bad tenants, scams and lawsuits.

By allowing a management company to handle the screening, you will be shielding yourself from rental scams directed at owners, and discrimination lawsuits resulting from an inconsistent screening process. Since an experienced property management company has gone through thousands of applications, knows how to quickly dig for the real facts about candidates and analyse that information for warning signs.

Fewer costly and time consuming legal problems

A good property manager is prepared with the knowledge of the latest landlord-tenant laws and will ensure that you are not leaving yourself vulnerable to a potential law suit. It only takes one troublesome tenant to cause significant financial and legal worries, as experienced landlords must have learnt by hard.

Federal law plus each state and municipality laws, cover a number of areas including but not limited to: Tenant screening, Safety and property conditions of the property, Evictions,Inspections, Lease addendums, Terminating leases, Handling security deposits and Rent collection. Avoiding an only law suit can more than pay for the property management fees, and spare you time and anguish.

Shorter vacancy cycles

There are three critical tasks that affect how long it takes you to fill your vacancies: turnaround time, rent rate and property marketing. A competent property manager will help you perform these by:

1. Improving and preparing the property for rent – A property manager will recommend and oversee improvements and a quick maintenance process that will enhance your revenue.
2. Determining the best rent rate – It requires knowledge of the local market, data on recently sold comparables, and access to rental rate tools to determine the optimal rent price. If the fee is too high you may be unable to rent it; but if it is too low every month the tenant is in the unit you will be losing money.
3. Effectively marketing your property – An experienced property management company understands what to say and where advertise since it has written hundreds of ads. This will, for sure, attract a higher number of candidates in a shorter period of time. In addition, theycan usually negotiate cheaper advertising rates because of their volume, both online and offline. Furthermore, they have experience with sales and know how to close when they getcalls from prospects and will more likely take them on showings.

Better tenant retention

The effects of lost rent are obvious. Still there are other equally serious problems with a high tenant turnover rate. The turnover process involves an effort associated with marketing, showing, screening and settling in a new tenant. Not to mention all the procedure necessary to have the property ready. It should receive a detailed and thoroughcleaning, locks should be changed, walls will need painting, and possibly new carpet or small repairs,. This is a time-consuming and expensive process that can often be averted by keeping tenants happy and well cared for.

A good property management company will shine with a time-tested tenant retention policy. These kinds of programs require a consistent, systematic and experienced approach, which ensures happy tenants with lengthy stays in your properties.

Tighter rent collection process

Your tenants need to understand that paying rent on time every month is not a negotiablematter. They should know they need to follow every part of the lease or deal with the consequences. If you let them, your tenants will walk all over you. For you, getting the payment monthly and on time is the only way to maintain consistent cash-flow. You put a buffer between yourself and the tenant, by hiring a property manager and allow the agent to be the bad guy who chases down rent, listens to excuses, and when necessary, evicts the person living in your property.

Tenants realize that property managers, unlike the owner, are only doing their job and are obligated to enforce the lease terms. This is an advantage for them. The difference between success and failure as a landlord can be the way you handle rent collection and late payments.

There are strict laws concerning the eviction process. For that reason, doing it wrong or trying to evict a “professional tenant” can be a foremost disaster. A good property management firm has a smooth process for obtaining the best possible outcome given the circumstances, in part because it knows the law. A compelling reason to consider hiring a property management company can never have to handle another eviction again.

Assistance with taxes

One major advantage is that the property management fees themselves are tax deductible.In addition, a property management company can help you identify and classify which deductions you can claim and how to do so by organizing the necessary forms and documentation.

Lower maintenance and repair costs

A very important part of land-lording is that good maintenance and repairs preserve the value of your investment as well as those improvements make or keep tenants happy. Whenyou hire a management company, among the services you will receive it is the access to both their in-house maintenance staff, along with their network of licensed, bonded and insured contractors who have already been vetted for good pricing and quality work.Compared to going through the yellow pages and hiring a handyman yourself, this meanssignificant savings in time and money. There is the advantage not only of the companyknowing the contractors and understanding maintenance issues such that they are capable of intelligently supervising those due to experience of previous work with the firm, they also may be able to get volume discounts on the work.

Increase the value of the investment

Through putting systems that catch and deal with maintenance in place and repairing issues early on, before they grow into larger more costly problems, preventative maintenance is achieved. This entails for a written maintenance check program, detailed maintenance documentation and regular maintenance visits. The management firm can also offer you suggestions and feedback on upgrades and modifications, with a detailed report on both how they will impact on maintenance, costs and insurance, as well as on how they willaffect the rent you can charge.

Personal benefits for owners

1. Free up more of your time – For many landlords, who are mainly investors, their time can be more profitably spent in areas other than servicing their properties. When you administeryour own properties you work in them, but when you focus on asset management you’re working on your business. Additionally, as we all know, time is money. Not to mention the advantage that you have more time to spend with family or friends doing things you enjoy.
2. Less stress – Hiring a property management company will have you avoid having to deal with piles of paperwork, middle of the night emergencies of tenants, chasing down rent, evicting people from your property, tenants who wreck your property, rental scams, lousy vendors, and so on.
3. More freedom – Once you have found a good management company, it doesn’t matter if you live in the same state. You can live and travel freely, without the obligation of always being available in the event that your tenants have a need you have to tend to. So, live and invest wherever you want without the limitation of needing to be near your properties. Some landlords even live in other countries without ever seeing the property and simply collect their check every month.