As a landlord, it can be a vitally important decision to hire a property management company to oversee your properties. Many landlords will manage properties that they own personally – often with the assistance of employees – but sometimes the process can be a bit overwhelming to the uninitiated, and in those instances the services of an experienced and reputable property management company can come in very handy to maintaining and growing your business.
The one thing you should bear in mind, however – given the myriad responsibilities and tasks they often will undertake while in your employ – is that the services of a property management company often can be costly. When interviewing companies, an average price quote would range between 5 and 10 percent of your overall rent revenue.
In addition, there may be other reasons why a property management company might not be the best fit for your personal goals as a business; please review the information below to help make the best decision for you, personally.
Property management companies deal directly both with tenants and prospective tenants, allowing you as the owner to free up your time for other tasks. They often will handle most day-to-day operations of any property that they oversee, including vetting possible new tenants, marketing your properties, collecting rent, handling maintenance and effecting repairs when needed, handling tenant complaints, and pursuing evictions. A good property management company will also have years of experience and a good reputation, and since they always function as independent contractors, you will not have to worry about serving directly as their employer.
You should consider hiring a property management company if you have numerous properties or rental units; the larger the scope of your business, the more you should consider the benefits of a property management company. They can also be helpful if you do not lie in proximity to your rental properties, as handling issues such as repairs or rent collection can be difficult and time-consuming when excessive travel is involved.
Property management companies are also helpful if you’re simply not the type of person who wants to deal directly with people all of the time. If hands-on management is not your style – such as dealing with problem tenants or other issues – then securing the services of a property management company to keep your business running smoothly while taking care of any issues that may arise.
If you’re also involved in other business ventures that constantly compete for your time, getting an outside company to run your properties for you may help free up your time to focus on other opportunities for revenue. And since Property management companies and their workers are not your employees – remember, they’re independent contractors – then you don’t have to worry about things like payroll or legal requirements and considerations. The property management company handles all of that for you- all you have to do is pay their fee, and the rest is on them.
Also, if your property is part of an affordable housing program, you might want to consider the services of a property management company that is experienced in such situations. In most affordable housing programs, the property owner receives financial assistance from a local government or municipality in exchange for agreeing to rent a percentage of his units to tenants who earn under a certain income level. There are often a complicated series of rules that come along with this situation, and there are property management companies that specialize in these conditions and the guidelines that govern them.
To find an experienced and reputable property management company, first check with colleagues and your local apartment association, who should be able to give you good recommendations on who to interview for the position. There are also internet-based directories to consult, such as the Institute of Real Estate Management and the National Association of Residential Property Managers. It can also be useful to read a copy of Every Landlord’s Guide to Managing Property. And once you find a prospective candidate, be sure to hold a comprehensive interview and ask them about every aspect of their business to ensure that you find the right fit for your valuable properties.