Why landlords should hire property management companies
One of the biggest decisions a landlord would need to make is whether or not a hiring property management companies is the best way forward for the portfolio. In most cases many landlords manage properties on their own they may use someone as an employee, which would be a resident manager. But sometimes landlords always need more help than they think, and that’s when property management companies will make sense.
A Property management company would deal directly with prospects and tenants, this in return would save you time and all the worries over marketing your rentals, collecting the rent including rents in guaranteed rent schemes, handling repair and maintenance issues, dealing with tenant complaints, and finally pursuing eviction notices.
The most important contribution a good management company brings is the know-how and experience to your properties, by giving you a peace of mind that comes with knowing your investment is in very good and reliable hands. Because a management company is an independent contractor, you avoid the hassle of being an employer.
When should you as a Landlord use a Property Management Company?
• You have more than one or two properties
• If you own more than one rental property you will have more units to deal with, you’re likely to benefit from the assistant of a good management company.
• You don’t live near your rental property.
• Living in an area where you don’t own the properties may prove to be time consuming, frustrating and tiring if the travelling distance is miles and miles away. A property management company can deal with all the issues related to your properties regardless of where they are located.
You’re not interested in hands-on management
As a landlord you will always look forward to the challenge of finding good and suitable tenants and the hope you will be rewarded with the maintaining of your property on its own. But, you may only view the property ownership strictly as an investment and therefore want little or nothing to do with the day-to-day management, then you should consider hiring help to manage your property.
You have limited time
There is nothing to stop an investor landlord from continuing with their day job and having a property portfolio at the same time for added income. The major disadvantage would be allocating time to tackle issues and problems with the property. However, you may prefer to spend your time growing your business, that would include searching for new properties, arranging renovations, or even the business structure, a management company may be a good way to spend your funds.
You can afford the cost.
Most property management companies will charge between 5-10% what you receive in rent revenue. This is a very attractive option if you can afford the fees.
You’re suddenly inundated with management tasks.
As with many landlords, you will at one point want to add more properties to your portfolio and grow the business bigger, it will make sense to be more responsible of wanting to manage everything properly by hiring a management company.
Many of the services you should expect from property management companies
• Advertising your properties to tenants
• Finding suitable and reliable tenants for the properties
• Accompanying tenants to view the properties and deal with their enquiries
• Getting references and conducting credit checks on all potential tenants
• Providing landlords with information on the latest safety regulations
• Preparing tenancy agreements
• Organising the collection of the tenant’s deposit
• Preparing inventories and conducting repair assessments
• Checking in the tenant and agreeing the inventory
• Rent collections from the tenant
• Transferring the rental income to the designated bank account with weekly or monthly statements of account
• Managing and arranging all necessary repairs
• Inspecting the property on a monthly basis with detailed feedings
• Providing notices at the end of the tenancy
• Quickly re-letting the property minimising any void period, under a Guaranteed Rent scheme there would be no void periods
• Dealing with legal aspects such as evictions, non-payments, harassment or problems with squatters.
To recap on the main reasons why you should consider a property management here are the five main reasons you should consider:
- Distance to your properties may pose a problem if far and you have a day job. Even though the distance between your home and your rental property may not be miles and miles apart and even be one property, the fact that it is likely you will have to travel on very short notices a few times a year to is required to tackle small or large issues may happen at inconvenient times is stress on its own.
- Your experience in managing a property may be very limited and if you have a drive to be at the forefront of managing and running your property, it may work to your disadvantage at times where experienced and professional property management companies would save you half the trouble and costs.
- The condition of the property will need maintaining and should you need to deal with more major problems, like a leaky roof, or multiple problems, you may find that all of this starting to becoming exasperating with the efforts to keep control of it all.
- Tenant screening and turnover will provide quality tenants, because you will want to find a tenant who reflects the qualities you look in an ideal tenant. Perhaps someone who doesn’t party too much, is in a full-time job, or is happy with your no-pets policy.
- Your other personal commitments may prevent emergency and urgent call outs. Your work, family, social life and of course me time will be priority but just how much can problems wait? And not acting on a problem immediately will cost you money and good tenants because tenants also do not want “I will deal with later” landlords.
The decision to hire a property management company will be required to reflect on your personal situation and capacity for maintaining of your properties.
These are solid reasons that need to be considered by landlords who are considering handing over responsibility for the management of their properties, whether is some or all of it, the fact is that there are legal responsibilities in managing properties and this on its own can end your landlord business venture very early.
The price for comfort and freedom if it’s affordable is a strategy for the long run.