You wake up one morning and discover the pot at the end of the rainbow is much more than a lucrative rental property. It is also a potential logistical nightmare that can transform the pot of gold into a mound of debt. A major decision all rental property owners face is whether or not to hire a property manager, and if it is worth the cost.
Whether you inherited or decided to invest in a single condo or a portfolio of apartment buildings, here are six reasons why delegating the responsibility of running the property makes sense.
The Price is Right
According to the property management specialists at Utopia Management, inexperienced landlords often set the wrong rental prices for tenants. This can be an exceptionally costly error in the Bay Area, where rental units typically run higher than the national average. A property management company knows exactly how to price different units to match value and the economic climate.
Promoting a Property
Now that you own a property, how do you promote the property to potential tenants? Savvy property managers understand how to leverage their own resources to reach the right target audiences. In addition to standard digital listings, they will list on their own site and market to a large base of potential tenants. Whether you do not have the time, or you simply do not know how to market your property, the right management company can step in to fill the marketing void, filling your property faster. This leads to fewer vacant months and more annual income.
Properly Screening Tenants
Sometimes, the motivation to make money by filling rental units supersedes the necessity to screen potential tenants properly. Attracting tenants to fill year-long leases should involve conducting background checks, contacting personal and professional references, and verifying the financial capability of each prospective tenant. A licensed property management company knows how to screen tenants properly. A well screened tenant translates to savings for you by minimizing evictions, late payments, and damage to property.
Resolving Tenant Disputes
There are two certainties in the life of a property manager: Taxes and tenant disputes. By tenant disputes, we do not mean full-scale shouting matches that end up costing a property owner precious rent money. Tenant disputes typically involve complaints that are associated with property maintenance issues, as well as concerns about noise levels and the interactions tenants have with each other. A property manager to handle tenant disputes will free up a significant amount of time, as well as reduce the costs of litigation. They are familiar with the legal requirements, as well as professional communication methods to insure less conflicts.
Speaking of Maintenance Issues
They say time is money, and when it comes to maintenance projects for your property, time can be an expensive proposition. Unless you have significant and varied property repair and maintenance skills, you are probably better off handing over the responsibility for maintaining your property to a highly rated management company. Property management companies build relationships with professionals that know how to maintain rental units. Further, they maintain incredible rates by offering their trusted contractors a high volume of work, passing this savings on to you. The icing on the cake is when you find a company that has their own in-house maintenance staff, who will take care of basic repairs on a day to day basis.
Follow the Law
State property laws and federal housing regulations can confuse the savviest legal minds. Imagine what the laws and regulations can do to your valuable time. Fair housing federal laws such as the American with Disabilities Act (ADA) not only contain dozens of legal provisions, the laws also frequently change. In addition, property tax laws almost require the services of a full-time accountant. A reputable property management company should stay on top of every change that concerns both state and federal property management regulations.
Unless you have devoted your time to managing a rental property, you should consider hiring a highly rated property management company to keep your rental units full of financially responsible tenants. The time you save by working with a property management company is the time you can use to pursue other interests.