Are you getting your money’s worth out of your property management company?
I’m always surprised by the number of investor/landlords who don’t take full advantage of the services, resources and skills that their property management company bring to the table. Wise investors seek to empower their property managers by making their job easier, and therefore more effective. After all, that’s what they’re getting paid for.
Investing, owning property and managing it all require different skill sets. If you’re good at two out of three, make sure that the management company you hire is good at the third. Professional property managers enhance the value of your property by augmenting your strengths with skills that it would take you time and money to acquire.
Characteristics of A Great Professional Property Management Company
A great property management can save you money and maximize your return. The following are six ways they do that.
1.) Choosing Rent Prices
Setting the right rent is not easy these days. Rents are rising, but they are rising at different rates depending on where you live. Moreover, single family rentals are priced differently than multifamily because they offer more space and appeal to a different tenant than apartments. Yet 90 percent of the information on local rentals you will see essential are multifamily rates. You can subscribe to a data service that may or may not have accurate single family rental data, but their data is probably at least a quarter old. That doesn’t help you project what you rents should be in six or 12 months.
Rents for single family homes nationally rose about 1 percent last year and demand is strong in most markets. You are probably thinking that your local market conditions will allow you to raise your rents modestly. But where is the line that will price you above competitive properties?
Your professional property management company probably knows. After all, he is managing a number of properties not far from yours. He’s probably done considerable research on the local rental market and knows what competitive properties are charging today and plan to charge six months from now.
2.) Writing Ads that Sell
Writing and placing ads may be something that you enjoy doing. Chances are, however, that you are not as good at it as someone who has years of experience working with online and print advertising outlets to attract tenants. Your property manager knows which outlets work best in your market and as a result, he can maximize your advertising dollars. He also knows how to write and use photos that underscore your property’s selling points and reach out to kind of tenant you seek. Nor is he susceptible to pressure from friends and acquaintances who might want you to help the out by advertising on their sites. Your property manager has relationships with the advertising media you will use, and he can get you deals you can’t get on your own. Money wasted in attracting tenants is money subtracted from your bottom line.
3.) Navigating the Legal Waters
Unless you’re a lawyer, you’re probably not expert in landlord/tenant laws in your state, county and municipality. But your property manager is. Professional property management companies must be familiar with the local laws that govern the landlord/tenant relationship. If you don’t have someone on your team with that kind of knowledge, and expert local attorneys available if needed, then you could be leaving themselves open to legal action. Good managers bring with them vital resources like lease forms, tax forms and other standardized documents.
4.) A Network of Contractors
When you hire a property manager, you may not think it as hiring a thick and current Rolodex of local contractors to help with repairs and maintenance. A good management company has a network of reliable, cost-effective contractors for all contingencies ranging from plumbing, electrical, carpentry and landscaping skills to properly maintain a property. When emergencies strike, they can make one call and get help when you might still be fumbling your way through Angie’s List.
5.) Tenant Screening
The added value a good property manager brings to the relationship starts at the very beginning, with tenant screening. Today the Web has a variety of different sites that provide screening services for a fee. You could subscribe to half a dozen without knowing which is best for your purposes and most cost effective. Managers have access to the range of services that conduct credit checks, employment verification and criminal checks. They can quickly vet prospective tenants and weed out problems before they move in.
6.) Professional Problem Management
However, should you find yourself with an unhappy, irresponsible or otherwise difficult tenant who violates rules and invites eviction, a good management company knows how to proceed in compliance with local landlord/tenant laws. A misstep can cost you dearly. If worse comes to worst, managers can call on professional legal support to resolve the dispute quickly so that your property can rented as soon as possible.
If you empower your professional property management company to apply all the skills and resources at his disposal, you’ll transform your relationship until you are a team that truly works together by complementing each other’s skills and abilities.
BP Members and Investors, Got any examples of you empowering your property manager?