Some people go into multi-family investments thinking it will be a breeze. After dealing with collections, maintenance, complaints, and repairs they will soon realize, being a landlord is a lot of work! At what point should you hire a property management company? It is a decision many landlords face.
Do the benefits outweigh the cost? Each situation is different. We have put together some points to consider before you hire a property management company.
What They Can Do:
Market the Property:
They will be able to showcase and highlight the property across many platforms. Property management firms often subscribe to the most effective online tools. Your property will likely be featured and placed in a more visible location on print and web materials. They will also post signs, list on the MLS, schedule showings, and process applications.
High-quality tenants vs. low-quality tenants will make or break your investment. Figuratively and literally. The average person doesn’t have as much experience as a property management firm when it comes to finding the best tenants for your home. An experienced property manager will spot red flags a mile away.
Your property manager will collect the monthly rent on your behalf and enforce any applicable late fees the tenant owes. They are often paid in a more timely manner as a private landlord is typically more flexible. (read: they are more easily taken advantage of.) Your property management company can act as collections, chasing down rent if need be. They can also handle the majority of the eviction process which can be tedious and tiresome.
Raise Your ROI:
They will take a good look at the living spaces and the grounds. They should immediately be able to recommend cosmetic touches and upgrades that will boost ROI. A good property manager will be abreast of what competitive properties are offering as far as upgrades and unique property features. They should be able to provide information about taxes including deductions and necessary paperwork for the property. A good property manager will help you maximize your investment.
Manage Maintenance & Repairs:
Your property manager will be able to keep up with maintenance and make repairs you might not be aware of. Experience goes a long way here. Knowing what to look for, as well as the most effective and efficient way to resolve the problem is a skill learned over time. they will receive multiple bids for repairs, ensuring your property receives the best service at the lowest cost.
Why You Need One:
You Own Many Properties:
If you own more than one property or unit, being a landlord can turn into a full-time job. Piles of paperwork, vendor relations, tenant needs, maintenance, accounting.. it will eventually make your head spin. A property manager is key to managing multiple investment properties.
Need Assistance Managing Funds:
The accounting alone on a rental property can turn into a full-time job. If you do not choose to employ a property management company, you should definitely make sure you have a competent accountant running your books. There are many deductions available to property owners.
You Are an Absentee Owner:
You can’t very well manage a property you own in NY if you live clear across the country. Trusting friends to help “keep their eye on it” is likely to end in a dispute with the tenant or your friend. You would be better served to use a reputable and local property management company. Someone who is looking out for your best interest.
When you are ready to hire a property management company, keep in mind, they will likely charge 8-12% of the monthly rental value. Some people would rather keep this money in their pocket, while others see the incredible value in having someone else take care of the dirty work!