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Professional Property Management: Why Use Them and How to Empower Them?

by Brenton Hayden on January 26, 2013 · 3 comments

  

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.

Summary

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?
Photo: FreeDigitalPhotos.net

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{ 3 comments… read them below or add one }

Jose Gonzalez January 26, 2013 at 10:03 am

Hi Brenton,
Really nice describing the topics with property management. What I believe now that is January, is that your managers also help you with paying the property taxes and HOA fees can relieve you so much work. I just give them a check from each company and they will pay each tax entity since it can be as many as 4 per house.
Great post!

Reply

Karen Rittenhouse January 28, 2013 at 1:17 pm

As a property management company, we are a member of a number of professional organizations including our local landlord association and the board or realtors. It is our responsibility to keep up with changing rules and regulations as well as contract and consumer protection laws.

With the constant ebb and flow of the economy, we are on the cutting edge of property values and rental rates, which change year over year, as do vacancy rates and percentage of the population that is renting.

We offer continuous communication with our tenants and homeowners through phone, email, monthly newsletters and online website portals.

So much of what we do to be effective property managers is behind the scene and goes unnoticed by property owners. Thanks, Brenton, for pointing out some of it here.

Reply

Candice Estey April 22, 2013 at 5:05 pm

I just found your articles and really enjoyed reading them. I have been a property manager since 1978 and things have changed. I love informed owners. The property managed needs to have a easy to navigate working website. Good pictures and descriptions. Plus, knowledge. Many people have recently joined the property management field and have caused many problems for owners due to lack of training. Join great associations and work with other pm’s. PM’s handle risk along with the people. But most of all love what you do, always

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