In real estate, the use of property managers is open to some debate. Some swear itâ€™s the best possible way to run a property and collect the highest potential profit. Others insist theyâ€™ll never use a property manager because of the cost.
Still others arenâ€™t even aware that property managers exist. If they are aware of them, they donâ€™t understand one they can do for a business.
Whether a property management company is right for your rental picture depends on the circumstances of your property. The utility can vary based on location, the size of your assets, the number of tenants, and your financial situation.
But you should definitely explore the profound benefits a property management company can bring to the table.
1. Reduced Time Commitment
The biggest expense for most landlords is usually time, and itâ€™s also the toughest to handle. Many new landlords have full-time jobs, with family and social obligations on the side. The time it takes to deal with tenants, maintain the property, and oversee the move-in and move-out process causes many landlords to quit before theyâ€™ve seen the potential income the venture could bring.
According to an infographic from the property management company Green Residential, a landlord can spend up to 24 hours per unit on such matters as moving in and out, answering phone calls, attending to maintenance requests, collecting rent, advertising the unit, and showing it to prospective tenants.
This situation doesnâ€™t necessarily occur within a single week, but when a tenant moves out, youâ€™ll often spend a lot of time working on the unit. Spreading out the time isnâ€™t an option if you want to see profits. Vacancies are incredibly expensive, since it costs money to fill a space and youâ€™re not receiving money from the unit in the meantime.
Property managers take over all the time-consuming aspects of running a property. Theyâ€™ll process maintenance requests, facilitate the move-in and move-out activities, handle evictions, collect rent, and deal with troublesome tenants.
Youâ€™ll making all the essential decisions, but the property manager will do the grunt work.
2. Invested Money
The biggest argument landlords have against property managers is the cost. They fear that when you hire a property management company, the fees will eat too much of the profit, and you may even see negative returns.
But this just isnâ€™t true: Many landlords see increased profits as a result of investing in property managers. Green Residentialâ€™s infographic also provides the following statistics:
- 77 percent of landlords believe their tenants stay longer in units maintained by property managers.
- 83 percent believe tenants are willing to pay more for rent because a property management company facilitates the property and processes.
- 86 percent say their money is invested wisely in a property manager because it increases their returns.
Even if it seems like a lot of money in the beginning, most landlords learn the monthly fee is more like an investment that raises revenues. Tenants tend to pay more for quality service, and thatâ€™s exactly what property managers bring.
3. Higher-Quality Tenants
Landlords dream of high-quality tenants: the kind of people who pay the rent on time, are respectful of their neighbors, and donâ€™t damage the property. It can be difficult to find such renters, but property managers can do it.
Management companies run extensive screening processes to ensure tenants are as good as they say on the application. The company will run credit checks and make sure the applicant hasnâ€™t had previous problems with paying the rent or damaging a property.
Good tenants are also more attracted to units that are maintained by property managers. The levels of cleanliness, maintenance, and comfortable living result in people willing to pay more and on time.
â€œWe manage hundreds of residential properties and every month we only have a handful of tenants who do not pay rent on time,â€ says Leon Green of Green Residential. â€œThis is a result of our conservative screening approach and strict collection procedures.â€
Higher-caliber tenants fill well-managed properties because property managers donâ€™t allow anything less than the best.
As stated near the beginning, a property manager may not be for everyone, due to your particular circumstances. But they bring a lot of advantages to the table that savvy landlords find it difficult to overlook.