Investors continually make the same mistakes when it comes to managing real estate, and the effects are devastating, no matter the size of the property.
Property management companies handle tenants and take care of any potential buyers, which aid the property owners greatly in saving time and giving them peace of mind regarding marketing for rentals, rent collection, maintenance and repairs, and many more tasks.
In a nutshell, a property management company uses its previous experience and know-how in order to manage and protect your investment.
Will you manage the property yourself, or hire someone? A property manager will typically:
- Advertise for new tenants
- Sign leases
- Collect rent
- Keep track of finances
- Schedule/complete maintenance/repairs
- Issue legal notices
- File evictions
Property managers usually charge about 10% of the monthly rent, plus 50% of the first month’s rent when a new tenant moves in. If you decide to do it yourself, the above responsibilities will be yours to handle. You can save a great deal of money by doing it yourself.
How much time you spend every w]eek managing your rental depends on several factors, such as the condition of the home and the quality of your tenants. It may be beneficial to consider outsourcing many of your responsibilities to a property manager if you:
- Live out of the area or far away from the property (driving to and from to sign leases, respond to issues, perform maintenance, etc. will add up)
- Have difficulty making repairs on your own due to physical ability, time constraints, or being out of the area
- Need help keeping track of bookkeeping and record-keeping for the property
Why Contract A Property Management Company?
- You are renting your property and/or have several rental units. If you are located far away from your property or you just don’t want to deal with the hassle of screening prospective tenants and handling all the issues that come with that, a property management company would be excellent at picking quality tenants, advertising and showing apartments to prospective tenants, cleaning units when tenants leave, and preparing them for new renters.
- You want someone who knows the laws and regulations. The property managing company will have knowledge of current laws and regulations. Their background will make things much easier for any tenant.
- You are busy/uninterested in the day-to-day management of your property. A property management company would handle all the needs of the tenants and handle any issues that may arise including security, drawing up lease documents, and bookkeeping.
- You want to capitalize on the lower maintenance costs: hiring a property management company means you get access to a network of professionals that will be able to do things efficiently and at a low cost since they know the ins & outs of the real estate industry.
What Do You Need To Know Just Before Hiring A Property Company?
- Hiring an experienced property manager can be the right choice for you if you don’t know the first thing about property management. Learning as you go can become very expensive.
- As the number of units you own increases, so do your responsibilities. The more tenants you have, the more maintenanceissues, complaints, and vacancies you will have to deal with.
- Before you hire a property manager, you need to assess your finances. Property managers are not free.
For example, a single-family home with a gross income of $1,000 a month might have a management fee of 10%, or $100, while a 5% fee would only be $50. In this scenario, paying the property manager $50 a month for managing a property would not be a great enough incentive to attract a quality professional.
If you have a full-time job while you are investing in property and simply cannot give your property the attention it needs, the success of your investment could depend on hiring a good property manager.
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