Yes, owning a rental property can be a great investment. It’s a way to build wealth over the long term, and can potentially provide regular income on a monthly basis.
Sounds pretty amazing, right?
But what you might not know is that a lot of planning and work goes into ensuring an investment property becomes successful. One key determinant to this success is how well a property is managed.
Now, property management can be quite daunting, stressful and a huge time suck. Simply put, not everyone can become a landlord! It requires a number of distinct skills that you may or may not have experience with.
To gauge your suitability, try asking yourself these 4 basic questions:
- Do I have the time to treat it like a business?
To succeed as a landlord, much is expected from you. You cannot afford to treat your rental business as a side gig. You will need to treat it like an actual business.
- Am I prepared to screen potential tenants?
Ever heard of those scary landlord horror stories? If so, then you understand that doing due diligence in finding tenants is critical.
- Do I have a good understanding of the rental laws?
There are federal, state, and local laws in place in regard to rental properties. These provisions cover anything from the rent amount to tenant eviction.
- Do I live near my rental property?
While not necessary, living near your rental property has its benefits. For example, it makes property repair and maintenance much easier.
While not exhaustive, these questions can help you get an idea as to whether or not you qualify to be a landlord. If you answered ‘yes’ to most of these questions and have the time to do all the landlord tasks, then great.
However, if you answered ‘no’, then it may be in your best interest to hire a professional. No doubt, hiring a professional property management company can add great value to your investment.
They have access to a wealth of resources, understand the local rental industry, and have probably handled hundreds, if not thousands, of properties over the course of their career.
Benefits of Working with a Property Management Company
1.A Reliable and Verified Screening Process
Would you want to rent to a tenant who has an eviction history? Or, one that caused damage to a precious apartment home? Obviously not!
On the contrary, you want a tenant who: pays on time, cares for your property, and stays for a long time.
An experienced property management company has sufficient experience when it comes to choosing the right tenants. They have been in the business long enough to spot a potential problematic tenant when they see one.
2. Experience in Legal Matters
A bad tenant can be a very costly nightmare. He or she can cause you a great deal of legal and financial headaches. This is especially true if you lack understanding of the federal, state, and local laws that guide the landlord-tenant relationship.
Among other things, the landlord-tenant law has rules on things like:
- Collecting and handling rent and security deposits
- Signing and terminating leases
- Unit inspections
- Tenant evictions
- Property conditions and safety
- Tenant screening
A good property management company has the knowledge and tools to protect you from any potential lawsuits.
3. An Efficient Rent Collection
Rent is the lifeblood of any rental business. As such, to have a successful rental business, you need to ensure that your cash flow is consistent and reliable. Experienced property management companies have tools and strategies to ensure this.
By hiring a property manager, you put a buffer between yourself and your tenant. This allows the manager to handle any tenant issues, including evictions.
Speaking of tenant eviction, it’s a process that’s governed by strict laws. Failing to follow these laws to the letter can turn out to be a big mistake. A qualified manager is aware of the eviction rules and can ensure the process is as smooth and time-and cost effective as possible.
4. Long-Term Tenants
A high tenant turnover can be expensive. This is because, once a tenant vacates your rental property, you’ll have to:
- Advertise your rental property again
- Go through the tenant screening process again
- Make small repairs. For example, replace carpets, repaint walls, change the locks, and clean the unit.
Aside from being costly, doing these things can also cost you a lot of time. Plus, you’ll have zero rent at the end of the month due to the vacancy.
Therefore, long-term tenants are crucial to the success of your rental business. So, when hiring a property manager, insist on one with a solid tenant retention rate.
5. More Personal Benefits
Hiring a property manager also means more free time, more freedom, and less stress for you. You’ll no longer have to deal with paperwork, damages, rent issues, and late night emergencies.
You’ll also have all the time to do other things that interest you.
There you have it. 5 main benefits of hiring a property manager. Before hiring one, though, make sure to ask them the right questions.