Whether you have one rental property or ten a good property manager can make all the difference. They will allow you free time to focus on other areas of your business and handle all of the tasks that most rental property owners despise. For this you pay them a monthly fee and get out of their way. On paper enlisting their services may seem like a no brainer. It is on properties where profit margins are slim when this decision becomes more difficult. Before you decide whether or not a property manager makes sense you should have a good understanding of exactly what they do. Here is a list of just some of the tasks that a property manager performs.
- Finding Tenants. One of the most difficult, and time consuming, tasks for any landlord is finding new tenants. This process should start weeks prior to the end of the lease. In addition to whatever marketing needs to be done you need to take the time to review all applications and schedule showings. As much as you may not like to believe it not everyone that sees your property wants to sign a lease. You may have to go through half a dozen showings before you find the right tenant.
- Coordinating Repairs. Even the best tenants will have the occasional problem with the property. On every lease there will be unexpected issues with the kitchen sink, bathroom toilet, dishwasher and more. How quickly you get this items repaired or replaced directly defines how you are as a landlord. Even if these may not seem like a big deal to you they are important to your tenants. Your property manager will coordinate these repairs as they are needed. You still have to pay for the work but you do not have to spend the time calling and scheduling the work to be done.
- Rent Collection. As a landlord you are only as good as your rent collection. You can do everything else right but if you aren’t collecting rent it doesn’t matter. Your property manager will coordinate whatever rent collection policies you want to enforce. They will collect and deposit your rent checks or if you would prefer direct deposit they will set up a dedicated account for that.
- Eviction. On occasion a bad tenant will slip through the cracks. Regardless if you a seasoned investor or own one property dealing with an eviction is never fun. Not only are you losing money on rent but the process is very time consuming. Between going back and forth to the property and the court house there is a lot going on. Your property manager will make this process as easy as possible for you. While you handle the legal side they will begin looking for a new tenant to make the transition as easy as possible.
- Emergency Calls. You never know what kind of tenant you are going to get. Some will call you with every minor house issue while others you will not hear from the entire lease. It is a frightening experience getting a call from a tenant in the middle of the night. Instead of dealing with these calls your property manager will act as the first line of defense. If it is an issue that can wait until the morning they will deal with it. Only if there is truly an emergency will they get you involved.
- Regular Inspections. As a landlord you job isn’t over once you find a tenant. To run an efficient property you need to conduct regular property inspections. Not only are you checking on the condition of the property you are looking to see that your tenants are complying with the rules. If you have strict rules against pets, smoking, parking or maximum number of occupants you need to conduct regular property inspections. This is a task that a property manager handles. They will relate any news to you so that you can decide how to proceed.
- Applications And Fees. There are certain towns that require an annual application fee to rent to college students. In these towns you are required to submit an annual application and pay a predetermined fee. Failure to pay this fee on time can result in the loss of your license. Depending on the location and how long you have owned the property for this license can be a valuable asset. Not only will your property manager make sure this is updated they will also get your home ready to pass any annual inspection.
A typical fee for a property manager is roughly 10% of the monthly rents received. In the big picture this is a small price to pay to run an efficient property. Not only does this give you the confidence in knowing that your rental is taken care of it frees up time to devout to other areas. This can be a problem on rentals where cash flow is not abundant. Then you need to decide if handling all of these areas is worth your time and effort. What you will find is that even if you can tackle the work it is usually much more difficult than you imagine. Like most things in real estate there are pros and cons with every decision. Before you decide if a property manager makes sense you need to know exactly what their job description is.