Managing rental property can be financially rewarding, yet it requires a large commitment of time and effort.
While it may make sense to take the do-it-yourself approach if you're a handy person, live close to your property, and don't mind devoting several hours per month to the task, in many cases this just isn't practical.
A property manager can help you:
1. Make sure you follow housing regulations and property laws: Did you know that lead paint, radon testing, bedbug and energy disclosure are required? There are a multitude of applicable laws and regulations to abide by when renting and maintaining your rental property. There are local, state and federal regulations, as well as fair housing regulations (such as the ADA). A property manager can help you avoid lawsuits by keeping your property up-to-date and in compliance with these regulations.
2. Set the right rental rates: While looking through the classifieds to see what other landlords are charging for similar properties is a fine way to ballpark your rent price, a good property management company will conduct a thorough market study in order to set a rental price for your property, ensuring that you achieve the perfect balance between maximizing monthly income and maintaining a low vacancy rate.
3. Collect and deposit monthly rent payments on time: If you've ever worked in a billing department, you know that securing payment from clients can be difficult, not to mention awkward. Property management companies have efficient, tried-and-true systems in place to effectively collect rent and maintain on-time payments. You'll find this particularly important if you have a limited number of properties, and collecting payments on time is crucial to maintaining your cash flow.
4. Market and advertise your property: Through long experience, a property manager will know exactly where to market your property and how to craft compelling advertising materials---a significant advantage when it comes to filling your properties quickly and avoiding long vacancies.
5. Find the right tenants: Experienced property managers are experts at finding good tenants, and will take care of all the details, including the securing all criminal background and security checks, running credit reports, verifying employment, and collecting previous landlord references.
6. Manage tenants: In addition to finding good tenants, a property management company will manage all aspects of the tenant-landlord relationship. The property manager will handle both routine and emergency maintenance, take care of routine inspections, and manage any situations where conflict resolution is required.
7. Oversee vendor relationships: Property management companies have relationships with maintenance workers, tradesmen, contractors, suppliers, and vendors that it's almost impossible for an independent landlord to duplicate. Not only will your property manager get you the best work for the best price, they'll oversee any necessary maintenance projects.8. Enable you to invest in geographically distant properties: If you manage your own properties, you're pretty much limited to investment opportunities within a tight radius of your own home. By hiring a property manager, you can take advantage of investment deals in any location you wish.
9. Give yourself more time: By having a property manager take care of the day-to-day aspects of running your income property, you’re free to spend your time identifying further investment opportunities, otherwise furthering your career or enjoy downtime.
10. Maximize your profit: Most property managers charge a percentage of your property's monthly rental rate in exchange for their services. The rate typically runs anywhere from 6-10%, which is generally less than it costs you to outsource each aspect and oversee it yourself. You actually save money by hiring a professional to take care of your property.