Some property owners either know deep inside or find out after several unsuccessful stints with tenants that they are not meant to be hands-on landlords. In other words, they may not have the time, knowledge or desire to do all the tasks that landlords must do in order to get the property to turn a profit. These property owners are the perfect candidates for hiring a property manager to come in and take over the day-to-day essentials of managing one rental or multiple rentals.
What is a Property Management Company?
A property management company is one that handles all tenant activities, from screening to evictions. In return for their services, they are paid by the property owner.
A property management company will generally provide owners with comprehensive services that include:
- Marketing vacant apartments
- Turnover tasks
- Arranging for maintenance and repair
- Applicant screening
- Collecting rent and deposits
- Refunding deposits according to city and state laws
- Delivering official notices to tenants
- Eviction process
This is only a short list of all the tasks that a landlord or property management company must perform, and for some landlords, it’s worth the time and money for someone else to do it.
How Can Property Managers Help?
The benefits of hiring a professional property management company include saving property owners a lot of stress, plus quite a bit of time and money. Unless landlords are willing to put in the effort to educate themselves on property management, they are at a higher risk of dealing with bad tenants.
Smart property owners know that a rental property only produces income when it is occupied by great tenants who pay their rent on time. These tenants must also be considerate enough to take care of the place and not do any damage beyond normal wear and tear. The flip side of this scenario is a bad tenant who doesn’t pay and causes considerable damage. It’s this situation that makes owning and managing a rental property time-consuming, expensive and frustrating.
Screening applicants is one of the most important aspects of ensuring that a property owner gets good tenants and if the owner skips this part of the process, it raises the risk of getting questionable tenants who may not pay the rent or who may not take good care of the property.
Vacancies and Retention
When a rental property is vacant, it can be a real drain on the finances of the property owner. After all, an empty rental doesn’t have anyone paying rent, meaning that the mortgage comes out of the owner’s savings. Sometimes, doing the marketing, turnover and more can take a lot of time for a busy property owner, but a property manager has the experience and expertise to shorten the vacancy time and get the unit ready for new tenants. Tenant retention is another important part of keeping units occupied, and a good property manager will do everything they can to ensure that good tenants stay put.
Creating and enforcing a solid lease agreement takes a lot of time and effort, and for many property owners, the idea of confrontation is both unpleasant and time-consuming. A property manager can act on behalf of the owner and spend the time enforcing the lease, such as sending out official notices, tracking paperwork, and fielding angry phone calls. If the tenant does not comply with the notice, the property manager can begin eviction proceedings instead of the property owner.
Another significant benefit is that a property management company will handle what is probably the scariest aspect of being a landlord–the legal situations that will inevitably arise. Getting up to speed on landlord-tenant laws for each state is a lot of work, and things can vary even from city to city. Property owners who either don’t have time or don’t have the desire can depend on a property manager to make sure that the property and the procedures are all legally compliant. Ignorance is a major cause of landlords ending up at court defending costly lawsuits, so hiring a company that is well-versed in landlord-tenant law can really be a benefit to property owners.
In summary, property owners who own several properties, have little experience being a landlord or who simply don’t have the time or desire to be a good landlord should consider hiring a property management company. The downside is that property owners will also have to include the expense of using such a company to their profit and loss figures. Some companies will do as much or as little of the work as the owner would like, while others are full service only. Also, rates for property management services will differ from area to area. However, for property owners who want the benefits of investing in real estate but don’t want the workload of a landlord, hiring a property management company is a viable option.