Many first time or small portfolio investors often opt to manage their properties on their own, skipping what they feel is the high cost of hiring a property management company. While they may feel as if they’re saving a monthly percentage or fee, they’re actually losing many benefits of hiring a company with experience in the rental market.
When it comes to adding extra costs to your rental property, you need to be careful. There are some additional expenses that can—and should—be avoided, but when it comes to property management, it’s an additional expense which benefits outweigh the cost.
So, what are the advantages of hiring a property management company?
In the real estate industry, it is a supply and demand business. You need to be able to stand above the crowd and a great property management company can help you to do this. In addition to helping you stand out, a property management company can help reduce risks, stress, and involvement for you—allowing you to essentially sit back and collect a passive income on your property.
Rental Rate Selection
Setting a rental rate should not be like a game of Russian roulette, but for some DIY landlords, it can be. If the price is too low, you’re going to be cutting yourself really short. Sure, you’re likely to keep the property filled, but you’re going to be leaving money on the table in the long run. If the price is too high, you’re going to have a high turnover and attract the wrong type of tenant. You’re also likely to experience larger periods of vacancy in between tenants.
Hiring a property manager can help alleviate this concern. They’re experienced in the market and know what the average rates are in your area. A reputable company will be able to maximize your monthly income and keep your location filled.
Let’s face it, nobody wants to knock on someone’s door and demand payment. It’s just not fun. Hiring a property management company will allow you to hand this responsibility over to someone else. They’ll be able to offer a wide variety of payment options to your tenants, such as online payments or direct drafts, and they’ll handle the icky-business if the rental payments are late or unpaid.
Marketing Your Property
One of the biggest keys to standing out in such a saturated industry is marketing. Sure, you can slap a For Rent sign in the front yard, but a property management company can get your listing into the right places and in front of many more faces than you’re likely able to.
Hiring a company trained and experienced in creating compelling advertising campaigns will reduce periods of vacancy and increase your monthly revenue.
Maintenance and Emergencies
Most property management companies offer a maintenance service. This includes routine maintenance on the property, but also 24/7 responsiveness to any emergencies that may arise. Instead of you getting the 3:00 am call that something went wrong, they do. Often it will be resolved before you even wake up.
In the rental property industry, it is important to stand out. How do you do that? By maintaining your property, marketing to the correct demographic, setting the correct and fair rental price, and keeping your tenants happy. Hiring a reputable and experienced property management company will accomplish all these factors and more—making them the most invaluable expense your property can have.
July 19, 2017