Few real estate investors acknowledge the benefit of having them as they are often unutilized because the real estate investors are trying to hang on to every penny from their income properties. Understandable. However, if you ask the real estate investors who have used a professional property management company, you will be surprised to know that they are more than happy to replicate their experience due to the ease of mind it brings them along with keeping the property safe and well-maintained. Isn’t that what all real estate investors strive for?
For those who are new in real estate investing, property management companies specialize in running your income properties for you. Accordingly, what property management companies do is find a proper tenant for your rental property, rent it out, maintain it regularly, and send you the rent checks. Not to forget that many Airbnb property management companies are offering the same services of a standard property managing company but tweaked and fitted to match the fast-paced nature of Airbnb rentals. Of course, there’s a fee for their services. In comparison, it is nothing of the hassle of dealing with tenants and late rent checks and, most importantly, those dreaded late night calls from a tenant.
What can property management companies do for your rental properties?
To begin with, property management companies are no work of wizardry. You will encounter problems or certain things that you won’t highly admire. On the other hand, the benefits of having one are worthy of the fee paid. Here are a few of the tasks and jobs that you can delegate to most property management companies:
Screen potential tenants
Having to go through tenant selection can be a lengthy and overwhelming process for most beginner real estate investors. Instead, property management companies can receive applications for you, conduct background checks, call references, and receive all calls concerning your rental property. If you wish to learn more details about the tenant screening process, read this blog post: Tenant Screening Process: Red Flags Landlords Should Not Ignore.
Determine the best rental rate
With property management companies’ expertise, they can help you determine the best rental rate to charge for an investment property that you have. Accordingly, your property’s value and rental income wouldn’t be under the market value of similar properties in the area. Moreover, property management companies conduct a real estate market analysis to know the market value of each property. This is typically conducted with an investment property calculator which any real estate investor can also use. If you’re a real estate investor or a property management company, you’re definitely going to make use of Mashvisor’s investment property calculator. Click here to make use of the 14-day free trial offered by Mashvisor.
Take care of expenses
Through the experiences that property management companies have, they are destined to accumulate a hefty number of trusted vendors. Accordingly, those handymen and vendors offer discounts on the finished jobs due to the frequency of jobs needed. That being said, property management companies have mastered the art of maintaining rental properties by conducting preemptive maintenance, thus, avoiding large-scale maintenance fees in the long haul.
Handle the landlord-tenant relationship for you
Professional property management companies’ skills expand to encompass the relationship between each landlord and tenant. Accordingly, the property management company will somehow establish a relationship with your tenant for you. If any agreement terms are being violated, they will warn the tenant for you and have him/her correct it. If a tenant has any complaint or emergency, he/she can contact the property management company. Still hesitant and choosing to skip hiring a professional property management firm? Read this blog post to help you along the way: 21 Tips for Landlords of Income Properties.
Manage a large number of properties on your behalf
For professional property management companies, there is no such thing as enough business. They can deal with all sorts of properties. It doesn’t matter if it’s a single-family rental property or multi-family rental property or out of state investment properties, they can manage it for you.
Keep in mind that after reaching a certain number of investment properties, you will need help. Meanwhile, property management companies offer just that!
Managing your rental property’s insurance and taxes
While many real estate investors may not need this service, it’s definitely a useful one to have available. To clarify, it all comes at an extra cost. Property management companies can take care of insurance for you if you choose to delegate it to them and thus relieving you of the stress of having to do it yourself. If you wish to keep your investment property’s taxes to your own handling, read this blog post: The Right Way to Do Taxes as a Real Estate Investor.
How much do property management companies charge the owner?
The inevitable question: How much does it cost? Keep in mind that many management companies have their own criteria for calculating fees. To be precise, the typical fee agreement allows the management company to deduct 8-12 % of the monthly rental income. That usually excludes property expenses.
What are the top property management companies available to investors today?
Lincoln Property Management
Based in Dallas, TX, Lincoln Property management company manages more than 170,000 rental units. The reviews are great and many real estate investors are sticking with this property management giant.
Pinnacle
Another Dallas, TX giant. Pinnacle also manages a whopping amount of 165,000 properties nationwide.
Alliance Residential Company
Based in Phoenix, Arizona, the Alliance Residential Company is constantly growing and focuses on treating any investment properties as if they owned it. Currently, Alliance Residential Company manages more than 90,000 rental units nationwide.
Should you hire professional property management for your rental properties?
Well, no one can really answer that for you! It all depends on whether you’re a full-time real estate investor or a part-time one. Moreover, it depends on the number of rental properties you own.
For those real estate investors who opted to use property management companies, it seemed to be satisfying enough for them to keep coming back. On the other hand, many real estate investors consider property management companies to be an added expense to an investment property’s cost and wish to eliminate it all together. It’s all about the situation of your rental properties.
To conclude,
Real estate investments don’t dictate a certain way of conducting business on real estate investors. The beauty of real estate investing is making money on your own terms and with your own business criteria. If it came down to hiring property management companies or not hiring, a real estate investor must include the ups and downs and most importantly, the costs of it. After all, managing an investment property is not an issue any longer thanks to property managers. So, stop postponing real estate investing on your calendar and start taking actions to make it happen.