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Is It Time To Hire Property Management Company?
Here’s a reality check. Are you planning to engage an independent property manager? We recommend you hire a property management company as it has its own benefits. They’ll be in complete control of all the aspects of managing your property, including tenant management, maintenance coordination, repair supervision, and bill payments. The people who work for a property management company are experienced and often have owned properties themselves. They are equipped with the tools to manage your property so you can focus on other aspects of your life.
Hiring a property management company can be worth your time in many ways. These companies are equipped with market and industry experience and can help you transition your properties from active to passive investments while maximizing ROI.
Will you save money if you hire an independent property manager for your property?
The decision to hire a property management company is based on a simple time and money calculation. Theoretically, a lot of property investors believe that they will save money by self-managing or by hiring an independent property manager to manage their property. But practically speaking, this is not always the case. Impromptu costs quickly tip the scales, and the ROI is not meeting your expectations. Here are a few ways a professional property management company will help you optimize your return on investment.
- Lucrative rentals
We often get clients renting out their property at a much lower rate than it’s worth. Surprisingly, 80% of property investors are not aware of the market trends, and end up undervaluing their property. A reputed property management company knows how to market a property, much better than an independent property manager. They know how much it will sell for and how long to wait before accepting a good offer.The price you pay for finding good tenants quickly starts adding up, from the listing, advertising, property showings, and screening, none of these comes free. Many landlords neglect to factor these costs in. From the listing, advertising, property showings, and screening, none of these comes free. - Addressing legal issues
It’s crucial to keep up with the real estate laws. The real estate market is regulated by three layers of law: local, state, and federal. Violating any of them can be problematic. A fine for violating the Fair Housing Act can potentially run upwards of $16,000. In addition, legal proceedings can rarely be swayed on grounds of a misconstrued or misinformed knowledge of the property laws. A property management company is used to regularly wading through the laws and regulations around property management. For example, Beach Front Property Management will help advise you on multiple things that you might have overlooked, such as rental agreements or dealing with problematic tenants. - Maintenance issues
Lack of proper maintenance or upkeep of a property is one of the most common reasons for tenant turnover. The longer it takes to fix maintenance issues, the more frustrated your tenants become. Not only will discontented tenants move out, but they will also leave a bad review on your property listing. This can make finding the next tenant even more difficult.An experienced property management company will handle tenants’ requests, complaints, and maintenance issues, including after-hours emergencies. Most companies have their own maintenance teams. Licensed teams of contractors, suppliers, and maintenance workers handle both emergency repairs and regular upkeep. This way you won’t be weighed down by contractor availability or issues of fair pricing. - Tenant screening & vacancy management
Finding good tenants involves more than just putting an ad up on Craigslist. The profitability of your investment property relies heavily on proper tenant screening. Ideally, you would verify the rental applicants’ income, credit score, criminal history, eviction history, and more to arrive at the right choice. Tenant screening is tedious on its own, and the possibility of a bad tenant can make things far more difficult, not to mention frustrating. This is one of the skills that a professional property management company does best. They give you the best chances of creating an eviction-free rental situation. Simply put, a property management company brings more to the table than just helping you find good tenants. Beach Front Property Management will ensure to bring a tangible change to your bottom line and help alleviate the stresses of managing a property.
7 Signs it’s Time to Hire a Property Management Company
A lot of property owners choose to hire independent property managers as they come at a comparatively lower cost than a full-fledged property management company. But when owners start seeing losses, they tend to make a tangible shift towards considering a property management company. Here are a few signs that you’ll eventually need to start thinking of hiring a property management company.
- You own a diversified real estate portfolio
If you have multiple properties in various locations, remote management can seem close to impossible. For instance, if a tenant calls you up for emergency repairs in the middle of the night, it can be painful to coordinate repairs. A property management company always has a team on standby to handle such issues. They are pros at handling the up-keep of multiple properties and also handle tasks like tenant screening, addressing maintenance needs, and working with tenants. - You value time and convenience
Time is precious, we get it! If you feel like your passive investment is taking all your time, it’s time to hire a property management company. A property manager can likely manage your property rent issues, frantic emergencies, leasing formalities, and a lot more. However, a property management company will be able to provide the same level of commitment to you and your property’s needs as an independent property manager. Your property manager can be a jack-of-all-trades, wearing multiple hats depending on what issues or tasks need to be handled, but being a jack-of-all-trades typically means being a master of none. Having a dedicated team of real estate experts ensures the right people are focused on the tasks they specialize in. - You don’t want to stress about legal dos and don’ts
A property management company can help you get the leasing documents off your desk, allowing you to focus on more important things. The company also stays up-to-date with local, state, and federal laws, helping you avoid non-compliance issues. - You are not a marketing expert
Marketing your unit is critical to securing your rental income and profit margins. Realistically, assess if you have the skills or the time to make this happen. If you have seen high vacancy rates in the past, consider hiring a well-established property management company as they have lasting relationships with trusted tradespeople and marketing companies. - Lack of accounting and bookkeeping skills
Accounting for your property is more than just keeping track of rental fees. Critical accounting includes: expenses budgeting, accounts receivable & payable, vendor management, maintenance of trust accounting, cost segregation, passive activity deductions, and accounts reconciliation, to name a few. We can’t stress enough the importance of maintaining proper books for your bottom line. Also, by hiring a property management company, you can be assured that you’ve not overpaid your taxes, or worse, made grave mistakes that can potentially attract the IRS.
The decision to hire a property manager or a property management company ultimately depends on your choices, lifestyle, and financial ability. Be sure to read our article on the pros and cons of working with a property management company before deciding.