Can Good Property Manager's Pay for Themselves?
I have a property management company which I am trying to grow. I started out 6 years ago as a real estate investor so I understand the philosophy of minimizing all costs to maximize your ROI. The question though is whether or not having the right property management company can actually increase your ROI (even after deducting their fees)? I believe it can.
Since we started as real estate investors, our companies focus on all the areas that rob ROI (mostly bad debt, vacancy periods, maintenance costs and monthly rents).
We lease prior to a tenant leaving to minimize vacancy periods (currently we close more than 2 weeks faster than average property management companies and that doesn't compare to investors who self manage).
Since we already own a lot of properties, we work to partner with cheap and skilled tradespeople saving maintenance costs.
We are proactive in our maintenance so our tenants are happier and they stay on average longer than most tenant occupancy periods (which saves the owner on future leasing).
We set up leases to end during summer months where we have the most tenants looking for new houses to rent so we can maximize rental rates.
Even though we rent fast, we prioritize make ready repairs so that we can continually keep the property up to maximize rental potential and identify and get great tenants.
We are proactive in our collection of rent so we evict faster than self managing investors.
We perform inspections to identify how tenants are keeping the property to not renew leases to hoarders and people who break lease terms.
We perform move in and move out inspections by video to document condition to charge back tenants on security deposits.
For some investors, they are not as on top of all aspects of property management and they should get help (to improve ROI). There are some property management companies who are not proactive like us and they do not really add value.
What do you think, can partnering with a holistic property management company actually increase ROI (even after deducting fees)? If you knew you had a holistic property management company, would you consider buying more?