What A Good Property Manager Can Do For You
By JD Esajian on January 29, 2016
Owning a rental property is not without challenges from time to time. As great as the idea of passive income is, it is not always easy. There are many landlords who like the rewards of owning a rental property but don’t like dealing with everything else associated. For these landlords, property management is the perfect solution. Instead of focusing on what you have to give up to secure a property manager, you should look at the benefits. In properties that have strong cash flow, 10% of the rents received is a small price to pay to sit back, collect rents, and focus on other areas of the business. Here are just a few of the things that a good property manager can do for you.
- Be your eyes and ears: A property manager should be considered whether you have one property or ten. If you are on the fence about spending the money on a property manager, you should make a list of the pros and cons. The biggest con is the loss of revenue. For the typical 10% management fee, they will act as your eyes and ears of the property. You should never have to make trips to your property unless you want to. This may not seem like much, but you no longer have to deal with the day to day drama that some tenants provide. A good property manager will give you constant updates without prompting.
- Rent collection: The most important task of your property manager is rent collection. If rents are not coming in, everything else is not important. Making sure that rents are received on time every month can be a grueling task if you have multiple properties. Inevitably, there will be a handful of tenants who will test the rules of the lease. Instead of you having to chase down your rent checks, your property manager will handle the task. Some managers may even set up automated deposits that will make your life even easier. This helps if you are the type of owner who does not like confrontation. Instead of reaching out to tenants with phone calls, make your manager complete this for you.
- Maintenance: All rental properties need work from time to time. A good property manager will inform you of seemingly minor items that could turn major if ignored. Instead of spending thousands of dollars down the road, these problems can be cured with just a few hundred dollars. It is important to note that a property manager does not pay for maintenance. You are still on the hook for any work that has to be done. A property manager will get you a few estimates and from there, you decide which way you want to go. If an unexpected toilet leak or other problem comes up, you could spend hours looking for someone to do the job and Inevitably, you will end up going with whoever is available. If that person doesn’t know what they are doing or doesn’t do the job to your standards, you will end up paying to have it done twice. Property managers usually have a handful of trusted contacts they can use to get almost anything done in a timely manner.
- Tenant screening and lease review: The end of a lease is always a stressful time for landlords. Not only do they need to wrap things up with the existing tenants but they need to find new ones as well. A property manager will make this as easy as possible for you. Screening tenants can be a very time consuming and frustrating task. One slip up can lead to a bad tenant, which can lead to a handful of problems. As a landlord, you are only as good as the tenants you bring in. A property manager will greatly reduce the chances that you have a bad tenant. They will follow up with references and reach out to their current employer. They will also review your lease annually to make sure you have everything you want on it. Instead of fearing a change of lease, a property manager will make the transition as smooth as possible.
- Handle town and legal problems: Most towns have strict rental policies. Some areas restrict or prohibit renting to college students. Other areas have parking regulations or limit the number of tenants per household. A good property manager is up to date on local rules and knows how to enforce them. If there is an annual license or application, they make sure these are taken care of before they expire. They are also are aware of the legal side of the lease. A property manager should not be confused for a lawyer but most do know the law. Since they are vested in your success, they don’t bend the law just to squeeze a few extra dollars out of the property.
- Give you more free time: Every second of your day is important. It is difficult to put a price tag on having access to increased free time. Free time in your business allows you to focus on other areas where you can generate increased revenue. Instead of dealing with rental property issues all day, you may never even think of them. Not only do negative issues dominate your time but also they impact your mood. This may not seem like much, but the people around you feel it. They won’t want to work with someone who has a negative approach to the business. A property manager alleviates you of this burden.
All rental property owners should consider a property manager. They may not work for every owner in every situation, but a good one can often make a huge difference.