Owning rental property is really great but it will also suck up a lot of your time. You will need to show up at the building to inspect it for degradation. You will need to make time for tenant complaints. In most cases, if you do not live nearby you will fail at managing your own property. For this reason and others, you will need to hire a property management company. A property management company is one that handles client properties carrying out different duties related to ensuring the success of your rental building. They will do everything and you will simply enjoy your bank account. Below are good reasons why you need to hire a property management company.
Tenant screening
You have to be very careful about who you admit in your building. You want someone who is going to mesh well with others. You want someone who will not disrupt the lives of other tenants. Most of all you want someone who will pay their rent on time and keep the house in good condition. The property management company has experience determining whether a tenant will be a good fit for a particular landlord and building. They will also know what questions to ask and what documents to ask to ensure that this person does not have a questionable background.
Tenant management
You will need someone to handle inquiries. You will need someone to handle issues brought up by the tenants. A property management company has expertise in handling tenants and whatever they may need. It is important to handle tenants and their issues skillfully to ensure that they are comfortable. It is important for the tenants to feel heard and taken care of. This reduces tenant turnover. It also helps them handle any changes there may be like, say, increase in rent or water rationing.
Improvement schemes
Every now and again you will need to do something to improve the lives of your tenants. The paint will need to be refreshed. You will need to get a secondary water storage system. You will need to have the building connected to different power lines so that it is not constantly experiencing outages due to overload. All these are things that you would have trouble considering and executing on your own. Due to lack of experience, you would probably not even realize what needs to be done to make the building better and your tenants happier. A property manager would. They would have no other responsibility but your tenants.
Setting rent
A property manager has a good grasp of the market. They know all the factors needed to determine how much rent should be charged. They would expertly balance the market baseline rent for that neighborhood with the costs of running the building as well as apply a sensible markup. They would ensure that the rent charged is fair and attractive to prospective tenants. The right rent will ensure that vacancies do not remain so for too long. The last thing you want is for your units to remain vacant for too long.
Building management
What happens when a pipe bursts? What happens when a windowpane breaks? What happens when there is a crack on the wall? Are you going to leave your day job to handle it? What are you going to do when the repairman you have hired shows up late or does not do a good job? You need someone who has a plug into all the best repairmen. A person who has the ability to tell if a repair has been well done. Someone who has the time to inspect the building for possible signs of degradation so that cracks do not become fallen walls.
Legal aspects
There is a lot of legalese that goes into owning a rental building. You will need rental agreements drafted and handed to new tenants. It is important to handle this aspect of it properly. There will also be a need for permits for when renovations are being done. When do you know you need a permit? A property manager would know. Taxes for rental income are filed every month. Will you remember to do that as well as take the time to pay the resulting charge? This is one great reason to hire a property manager.
Expertise
A property management company employs proper professionals. People who have been trained in managing buildings and properties. People who have the knowledge and the networks that make that job easier and possible. This is one of the biggest reasons why you would need to hire a property manager. You might lack the expertise and skill to handle things. Most things you can learn but then by the time you learn money will have been lost and damage will have been done.
Free up time
If you decide to do this on your own then you should plan to spend a lot of your time at the building taking care of one thing or another However, if you also have a day job or some other business then you will find that it is hard to balance work at the building and your own job. Your weekends will be booked up as well as some of your leave days Having a property manager frees up time for you to do your day job. Besides it is better for there to be a buffer between you and the tenants.
Handle bulk properties
If you have many properties, will you show up to each when there is an issue to be handled? Will you write all the receipts personally every end of the month? Will you have time to inspect and do repairs for all the buildings on your own? It is with absolute certainty that one ball will drop. One building will fall through the cracks. A property management company will have a proper schedule in place to handle issues as they emerge.
How to choose
Honesty
You need a company that is transparent about how they handle your building and your tenants. You need a company that does not keep issues from you or tries to cover up mistakes. You need a company that is transparent with the tenants. One that will not inflate the rent to fleece your tenants. You should also find a company that employs honest people. People who inspire trust and confidence in you. People who do not make you need to constantly check their work and confirm that things have been properly done. Honesty is an important attribute in a company that is going to be handling your money and your business. You do not want a dishonest company holding the fate of your business.
Diligence
You will need a well-organized company that foresees issues. For example, you will need a company that will repaint the building before it becomes run down and the paint is completely undone. The company should know to refresh a unit immediately after a tenant has moved out instead of waiting for the next tenant to show up and scramble to paint and fix faucets then. Basically, you want a company that handles things with diligence and sequence to avoid disrupting the tenants and normal building operations. All renovations should be planned and radical repairs left to days when there is little occupancy and most tenants are away.
Experience
This is quite possibly the most important attribute in a company next to honesty. Experience means knowing what to do in emergencies. Experience means having established handymen that show up when needed to do what is required well. Experience means a company that will not need to call you every time someone moves out without paying for things they broke. They will know how to direct you towards improving your building and tenant experience.
Employees
Who does the company employ? What kind of person are they? Are the honest? Are they trained? Are they experienced? How committed are they to their job and your property? Can the handle the pressure of handling all your buildings? Do you feel like you trust them? These are the people you will be dealing with directly. The people who will be dealing with your tenants and handling maintenance. As you are checking out the company’s capabilities in general, you should also have a look at who is on staff.
Many people prefer to use caretakers instead of property managers. They may be cheaper in some instances but then when it is time for them to mess you up they will be able to disappear without a trace. A company will not risk its business for one account so you are assured.
