If you are reading this, you may fit into several categories. You own one rental or you own several properties, it’s possible that some of you don’t even live in Manhattan. Another category might be that you want to buy your first rental property. No matter, I want to start a dialog with you.
One of the biggest decisions you’ll make as a landlord is whether you should hire a property management company. Many landlords manage properties on their own or with the help of current tenant, or the neighbors or a family member. Sometimes landlords need more help, and that’s when a property management company might make sense.
Property management companies can be a huge asset to your business. There are other reasons why you might not want or need one. Carefully review the factors discussed below to determine if hiring a property management company is the right move for your business. You also might consider seeking a “second opinion” if you already have a property management company.
What does a Property Management Company do? Management companies deal directly with prospects and tenants, saving you time and worry over marketing your rentals, collecting rent, handling maintenance and repair issues, responding to tenant complaints, and even pursuing evictions. Plus, a good management company brings its know-how and experience to your property, giving you the peace of mind that comes with knowing your investment is in good hands. Finally, a management company is an independent contractor, so you avoid the hassles of being an employer.
When should you hire a Property Management Company? Although hiring a property management company has many advantages, you might think using one can be expensive. And even apart from the cost, relying on a property management company is not for everyone. Consider the following factors to determine if hiring a property management company would be a good decision for your business.
You should consider hiring a property management company if:
You have numerous properties or rental units. The more rental properties you own and the more units they contain, the more you’re likely to benefit from a management company.
You don’t live near your rental property. If your rental property is located far from where you live, hiring a property management company can be invaluable in dealing with the many issues that you will not be able to handle from afar.
You’re not interested in hands-on management. Many landlords look forward to the challenge of finding good tenants and the rewards of maintaining a safe and attractive property on their own. But if you view a rental property ownership strictly as an investment and want little or nothing to do with the day-to-day management of your properties, consider hiring help to manage your property. Or it’s possible that you purchased the property thinking you wanted to manage it yourself and now it’s more than you want to tackle, you do have options.
Your time is limited. Even if you enjoy hands-on management, you may not have much time to devote to your business, especially if landlording isn’t your day job. And if you prefer to spend your time growing your business, including searching for new properties, arranging financing for renovations, or changing your business structure, then a management company may be a good way to spend your money.
Is your marketing immobile, outdated and expensive? A property management company has many opportunities & a wide range of avenues to easily and effectively market properties so you can dramatically increase the number of potential renters that find your rental units. Social media integration with Facebook, Twitter, Instagram and many more are all necessary in today’s marketing. Property management marketing in all of these places means you’ll fill vacancies faster.
You can afford the cost. Hiring a property management company is an attractive option. When interviewing companies, expect to hear quotes ranging from 8% to 10% of what you collect in rent revenue. But also be sure to ask what services are included for that fee. 8% isn’t necessarily cheaper if every time you turn around there is an additional fee for something such as marketing fee, marking up maintenance charges, etc. A property management company will probably achieve higher rents with less vacancy rate and receive better pricing on maintenance & repair services.
You’re suddenly inundated with management tasks. If your business is growing, at some point you may find that you need a substantial amount of help to manage everything properly. At that point, it might make sense to hire a management company.
You don’t want to be an employer. If you hire a manager or other employees to help with your property, you become an employer. You’ll have to handle payroll and deal with a host of other legal requirements and considerations. But, because the property management company isn’t your employee (it’s an independent contractor), and neither are people who work for the company, by using one you avoid the hassles of being an employer.
Call us at Emerald Property Management for a free no obligation consultation appointment to discuss what services we provide. 785-587-9000.