Owning rental properties can be a great source of income. However, it requires a lot of time and effort. A management company can help you save time and focus on other things.
They are always updated on real estate and rent trends. This allows them to determine competitive rates and when it’s time to raise the rent.
Expertise
Rental property can be an excellent way to diversify a portfolio and generate passive income in the long term. But landlording is a time-consuming job that requires the ability to manage multiple properties simultaneously.
Management companies have the experience to know how to list units in the right places, screen applicants carefully, and keep track of payments. They also have knowledge of fair housing laws and local zoning ordinances.
Landlords who own multiple rental properties often have to leave their kids’ soccer games or other commitments to deal with maintenance issues. That’s why having a 24-hour hotline that tenants can call for repairs is essential. Management companies can handle those calls for landlords who want to stay away from their rental properties.
Similarly, when a tenant is more than a month late in making payments or is breaking other terms of the lease agreement, a property manager can quickly find solutions and prevent these situations from getting out of hand. This saves landlords a lot of stress and frustration.
Time
Managing rental property requires a lot of time. Landlords can choose to learn how to manage their own properties, or they can hire a management company to handle the day-to-day operations. A management company will typically charge a monthly fee, but for landlords who have full-time jobs or live far from their rental property, hiring a professional may be worth the cost.
There are many resources, educational materials and customer support available for landlords who decide to take a DIY approach to their property management needs. Some online rental management systems offer done-for-you marketing packages that can list open units on top sites quickly and easily.
However, juggling maintenance schedules, tenant screening, lawyer-reviewed lease agreements and tracking rental property accounting can be challenging for anyone, especially if the owner has multiple investment properties. If you’re considering a DIY strategy, be sure to ask the management company about what their fees are and how they bill for services.
Money
Whether you self-manage or use a management company, it’s important to set up at least one banking account that is used solely for rental property income and expenses. Most state landlord/tenant laws require that tenant security deposits be maintained in a dedicated savings account.
A property management company will charge a monthly fee that can be a fixed amount or a percentage of the rent. These fees vary depending on the size of your investment property and the services provided.
They’ll advertise the property, handle tenant applications, screening, and lease signing. They’ll also track local market rents to help you decide when to increase the rental rate. They’ll also collect rent on your behalf and maintain up-to-date records of all income, maintenance requests, and inspections. They’ll also be responsible for filling vacant units quickly to avoid costly vacancy periods. They’ll also keep a list of reliable service providers, from professional cleaners to plumbers, that you can call when an emergency arises.
Responsibilities
Depending on the company and contract, management companies take on many operational tasks as well as tenant communication. This helps lighten the load for landlords and allows them to manage their investment with less stress and effort.
The property manager can also help limit vacancy time by creating targeted advertising. They can also assist with screening tenants to ensure that they are good candidates for the property. This typically involves conducting credit and background checks, as well as a reference check to verify income levels and employment status.
In addition, a management company can help to ensure that landlords comply with local rental regulations. These can include standards such as rent increases, maintenance responsibilities and the rules around security deposits. Management companies can also be helpful in determining if a landlord is eligible for an affordable housing program, which often involves receiving grants or loans with low interest rates in return for renting to those at certain income levels.management company for rental properties