ADVANTAGES OF ENGAGING A PROPERTY MANAGER
Owning a rental property can be a great source of additional income. However, it also comes with the added responsibilities of property upkeep, repairs and marketing. If you’re asking yourself “do I need a property manager?” — consider these eight benefits of hiring one. A property manager will:
1. Screen out problem tenants
One of the biggest benefits of property management is that the property manager will handle tenant screening. Experienced property managers see hundreds (or thousands) of applications, so their trained eyes are more likely to notice potential red flags when reviewing an applicant’s paperwork. They’re quickly able to spot good tenant qualities, such as paying rent on time, taking care of the property and more. Letting them manage the tenant screening process can improve your chances of landing a reliable renter.
2. Act as the point of contact for tenant concerns
If something breaks at your property, it’s not always convenient or possible to drive over to the unit to inspect it yourself (especially if it’s in another town or state). A property manager can address problems at all hours of the day and arrange for a service provider to repair or replace the item. Or, if you have a tenant who always seems to have a complaint — be it the noisy neighbors or the dog who relieves itself on the front lawn — you can breathe easy knowing that the property manager is the point of contact for those types of calls.
3. Market your rental
Property managers are skilled at rental marketing, including writing rental ads, taking high-quality photos and hosting open houses. They also have local real estate knowledge and will be able to help you set a competitive rent price. Hiring a property manager with marketing experience can help fill your property sooner and reduce the time it sits vacant. If you plan to market your property yourself, Zillow Rental Manager offers a hassle-free way to list your rental on multiple high-traffic websites. In fact, according to the Zillow Group Consumer Housing Trends Report 2018, 73% of renters use online resources when shopping or searching for a home — so it’s a good idea to list your rental on the right sites to attract those potential tenants.
4. Decrease tenant turnover
Good property management companies know how to keep their renters happy. They are responsive and available, and they take care of problems when they arise. Happy renters are also less likely to look for another place to live and more willing to accept reasonable rent increases. Of tenants who choose to stay in their current lease, 50% think their home is a good value for the price and 40% say they love the place they rent.
5. Ensure rent is paid on time
Because property management companies deduct their fees from the monthly rent, they are motivated to keep those payments flowing in. Consistent rent collection is key to receiving rent payments on time, and a property management company will enforce lease policies if payments aren’t received. If tenants are consistently failing to pay their rent on time (or at all), the property manager will know how to deal with the situation, including issuing an eviction notice if necessary. Payment collection can be a common issue — the typical renter spends 29% of their income on rent, and a significant share of rental households are one large expense away from being unable to pay.
6. Avoid potential legal issues
Property managers understand landlord-tenant laws and fair housing laws, which can help you avoid potential lawsuits and save time, money and energy in the long run. They will also typically take care of any lawyer fees associated with evictions or property damage issues. If you’re not comfortable handling things like evictions, signing and terminating leases and handling rent and security deposits, you may need property management company expertise.
7. Save you money on maintenance and repair costs
Property managers may also have discounts for maintenance services because they work with a regular service provider — or they may even employ an in-house maintenance staff. They can perform regular inspections and find issues before they turn into bigger problems, which will reduce the number of emergency repair bills.
8. Reduce your rental headaches
If someone else is handling the daily management of your rental property and tenants, you’ll have fewer complications and commitments to worry about. If more time and less stress are key to your quality of life, a property management company can be a great asset.
These are the basic pros and cons of property management. Investing in real estate can contribute to your monthly cash flow and build long-term wealth — but day-to-day management isn’t for everyone. If you just want a rent check and don’t want to be responsible for the details of your real estate investment, consider all the property management benefits that you’ll receive for a percentage of your rental income.