Did you know over 36 percent of households in the United States are currently living in a rented property? This is higher than any other point in the last five decades!
As a landlord, this is exciting news. An increasing number of renters means your rental property will rarely lack tenants.
However, you have a decision to make. Would you rather self-manage your property or hire a property manager?
The truth is both options have their upsides and downsides, but hiring a property management company is the smarter decision. Keep reading to find out why.
In an ideal world, you expect your property to be fully occupied at all times. If a tenant moves out, a new one should move in almost immediately.
Unfortunately, that’s not how it always works. Sometimes the supply of rental units outstrips demand, meaning 100 percent occupancy isn’t guaranteed.
What should you do? The key is to hire a property manager.
These professionals know the art of property marketing and advertising. They’ll list your property on various classifieds, promote it on social media, and deploy other marketing strategies that’ll ensure a steady inflow of tenants.
Setting Rental Rates
As a real estate investor, there’s no doubt you know quite a bit about money. However, setting rental price is a different ballgame.
If you don’t have an intricate understanding of the current market conditions and the income level of your target market, you might end up setting the wrong rent price. Set the rent too low and you risk taking a long time to reap a return on your investment; set it too high and no tenant will look at your property twice.
This is yet another reason you should hire a property management company. You can count on the experts to conduct a thorough market study and come up with a rent price that strikes a balance between maximizing your income and maintaining low vacancy rates.
Are you the kind of landlord who approves just about any tenant as long as they are able to pay the rent? If yes, you aren’t doing your property any favors.
Tenant screening is important because it helps you to not only verify a prospective tenant’s ability to pay rent but also examine their criminal background. You want a tenant who will respect your property and other tenants. Without a screening policy, you could end up with rogue tenants who could harm your property’s reputation.
The question is: do you have the ability and tools to conduct thorough tenant screening?
The answer is probably no, and that’s why you need to hire a property manager. They have the capacity to screen several prospective tenants and pick out the ones who meet your requirements, all while complying the relevant housing laws and guidelines.
If you’ve ever been a tenant, you probably know the hassle of keeping up with rent payments. When your paycheck delays or there’s a disruption to your cash flow, the most likely result is your rent payment will be late.
As a landlord, it’s inevitable that you’ll have to deal with such tenants. While it’s understandable that money gets tight from time to time, there’s no fun following up on an overdue payment. Plus, it’s time-consuming.
Property managers are rental collection experts. They know how to deal with late payment cases professionally, pushing the right buttons when necessary.
Your only job will be to wait for the monthly rental income to hit your account!
Handling Tenant Complaints
No matter how efficiently your property is run, tenant issues or complaints will always arise. It could be a tenant playing music loudly, a leaking faucet or frequent power outages.
Regardless of the nature of the complaints, it’s crucial to resolve them quickly. If you don’t, nothing stops some of the tenants from moving out and telling their friends about your slow complaint resolution process. That’s how your property’s reputation gets soiled.
The solution here is to hire a property a property management firm. They’ll stay on top of tenant complaints, taking the necessary steps to resolve them. If there’s an issue that needs your attention – maybe a tenant is, for whatever reason, pressing charges – the firm will let you know and advice on the next steps.
Managing Vendor Relationships
Before you can start renting out your property, you’ll need to contract a number of vendors to provide a range of crucial services, including security and cleaning.
Do you know where to find the best vendors?
If you’re a first-time landlord, it’s unlikely you have any previous business relationships with such vendors. As such, you could end up choosing pricey or unreliable providers.
On the other hand, property managers already have existing relationships with all the vendors your property will need. They’ll negotiate the cost of services on your behalf, ensuring you get the best deal. And once the vendors are hired, the property manager will ensure they’re paid on time in order to avoid service disruptions.
Ultimately, professional vendor relationship management will save you money. Be sure to learn more about the various things property managers can do to keep more dollars in your pocket.
Makes It Easier for You to Invest in Distant Properties
Opting to self-manage a rental property limits your investment strategy. You can only invest in properties that are in your locality.
But when you chose to work with a property management company, you gain the flexibility to invest in distant properties. You’ll rest assured knowing the company will take good care of the property while putting your interests first.
Hiring a Property Management Company Is a Smart Move
Purchasing rental property is one of the best investment decisions you can make. However, the performance of the property will depend on how you manage it.
Although hiring a property management company costs money, we’ve fleshed out the numerous benefits you’ll reap. Really, it’s a classic case of spending money to make even more money!
Stay tuned to our blog for more real estate tips and insights.