Property management firms exist to administer Real Estate, be it residential, commercial or industrial properties. They are supposed to provide management services to properties owned another party or entity.
As a property owner, the most important decision you will ever make is whether or not to hire a property management company. While some people often shun them because of the costs they attract, others recognize the beneficial nature of their services.
Before making any major decisions about property management companies, it is essential that you first understand what they might have to offer to you.
What does a Property Management Company Do?
If you are uncertain about the prospect of hiring a property manager, it is likely that you do not understand what a property management company can do for you and the sorts of services they tend to avail.
In which case, it will behoove you to learn as much as possible about the average offering of tasks property managers typically accomplish, these including the following:
If you have a property, then a property manager will help you market it for rent. More than merely spreading the word about your property, though, marketing companies will actually take steps to prepare your property for rent.
This means cleaning the interior and manicuring the exterior. They will also customize ads to appeal to your particular target audience, sending out flyers, putting up signs, paying for print publications and even utilizing social marketing techniques.
The one crucial advantage of Property management companies is the connections they have with other realtors and leasing agents with whom they can work to simplify the process of finding tenants for you.
And you need not worry about fielding calls from prospective tenants; neither do you have to do all the legwork involved with preparing viewings. Property managers stand in the gap for you, meeting tenants, contending with questions and scrutinizing applications.
2- Tenant Selection
Even if your property can sell itself and marketing was never your problem, property managers can become indispensable when it comes to actually screening prospective tenants and making selections.
Any competent property manager knows that your choice of tenants can drastically impact the level of success you will attract in real estate. It takes time and effort to screen tenants and select those individuals that are most likely to suit the environment of your property.
You need to investigate a tenant’s background, look at references, explore their financial strength in order to determine each tenant’s ability to pay their bills on time and so on and so forth.
Unless you have a few weeks to burn, you are better off trusting these mundane yet essential tasks to a property manager.
3- Rental Appraisals
Even if you can market your own property, find your own tenants and screen them, especially if you have a wide network of friends, how are you going to determine the rental value of your property?
Property managers are essential when it comes to appraising your property, determining its value and, hence, figuring out the amount of money you can charge in rent every month. Property management companies can guarantee accuracy here because they understand the market and can account for the past, present, and future fluctuations.
4- Tenant Agreements
Because property management companies act as middlemen between a landlord and his tenants, they provide peace of mind when it comes to dealing with tenants when they finally move in.
Property managers will undertake the responsibility of drawing up leasing agreements, reviewing guidelines with tenants when it comes to issues like property maintenance and carrying out inspections.
Property managers will even undertake the task of not only ensuring that all agreements are executed but they will also collect rent. They will even hunt down late payments and send out pay or quit notifications.
In other words, if all the stories of nightmare tenants have frightened you away from the prospect of dealing in real estate, property managers could be that screen you need between you and your tenants, allowing you to financially benefit from your property while avoiding the hassles that tenants attract.
5- The Law
Property Management Companies will participate in all legal aspects pertaining to a Landlord and his tenants. They deal with evictions, initiating the necessary paperwork and even working with law enforcement agents to remove stubborn tenants.
You can also trust them to represent you in court. If you are new to the real estate arena, and you cannot make heads or tails of property management and all its intricate details, you can trust property management companies to bring you up to speed when it comes to your legal rights and responsibilities.
Along with ensuring that you abide by all the legal requirements in place, property managers can also refer landlords to qualified attorneys whenever the need arises.
Property Management firms ensure that your property is properly maintained; this includes carrying out periodic inspections and dealing with repair needs, code violations, and safety hazards.
And you need not worry about losing track of the goings-on of your property because managers will send you periodic reports on the state of your property.
Property managers make it that much easier to manage the finances of your real estate. Not only do they keep detailed documents of all financial transactions but they manage taxation matters, make payments on behalf of the landlord for things like insurance and mortgages, and generally, account for the financial state of the property.
You can look forward to cash-flow statements every month through which you can better understand the financial status of your property.
Along with carrying out maintenance, repair, and remodeling, and dealing with tenants that are moving out (inspecting units, estimating the cost of damages, cleaning out units etc), property managers are indispensable to any serious property owner. They will make your life easier even while ensuring that you continue to profit from the operations of your property.
When should you Hire a Property Management Company?
Important as property managers might be, not everyone actually requires one in order to sell or lease property. Take the time to first determine whether or not you actually need a property manager before you incur unnecessary expenses.
Consider reaching out to a competent manager if the following issues and situations arise:
You need to hire a property management company if you have more rental units than you can possibly administer on your own. A manager will help you keep track of everything, even when your glut of tenants becomes an issue.
If you live far away from your property, you cannot afford to not hire a property manager who can keep a close eye on your property and ensure that everything is running smoothly. You cannot make lengthy trips to see your property every time one of the several minuscule problems arises.
Sometimes you have all the talents and abilities necessary to administer your property but you just don’t have the time to take a hands-on approach to management. This is especially true for people who are employed, in which case property management firms will come in handy when it comes to marketing your property and dealing with tenants on your behalf.
Most people choose to hire property management services because they do not want to deal with the hands-on managerial duties involved. For the most part, though, even if you do not necessarily need a property management company, if you can afford the costs, then you are better off hiring one.
This will make the entire process of administering your property that much easier; property management firms boast professional and highly experienced employees that can guarantee the successful and lucrative administration of your property.
Why contend with all the financial and legal requirements of managing real estate when you can leave all those complications in the capable hands of a property management company?
Cost of Using a Property Management Company
Most property management companies charge between 5 percent and 10 percent of the total revenue you collect within any given period of time. Expect the costs to vary, not only depending on the property management company in question but the services they provide.
Avoid prioritizing the cheapest property managers you can find. Your need a property management company that is motivated to keep your property occupied and operational.
This means taking the time to find a competent property manager and negotiating a deal that rewards the both of you.
For the most part, no one can deny the importance of hiring a property management company. Even if you do not care about the fact that they will keep your tenants happy and ensure your property turns a profit, you can trust them to make your life as a property owner much easier, providing maintenance and repair services as well as financial assistance, this along with tenant screening and selection.