This is a question that comes to mind to every real estate investor who is usually new in the market and hasn’t had a taste of the benefits that it provides. Ensuring profitability in property investment isn’t as simple as just relaxing on the sofa, and expecting the money rolling in by the end of the month. A lot goes into real estate management, maintenance, and creating a plan engineered to reap profits.
In this article, we are going to talk about every issue that a real estate owner faces and how property management companies can help them overcome those challenges and ensure that the money keeps rolling in!
Who is a Property Manager?
A property manager or management company is a third party who is responsible for the daily oversight of residential, commercial, or industrial real estate. They are responsible for handling daily operations like repairs, ongoing maintenance, advertisement, security, and upkeep of properties.
How can Property Managers Help Investors?
While for some people it may occur to them that they might be able to handle all issues related to their properties and think that they have the hours and resources required to do so, for most it simply isn’t practical, especially if they are working men, or are looking to expand their business. With that in mind here are some of the core areas where a property management service comes in handy –
- Fixing the Right Rates: Most of the investors and owners are new to the market and lack industry knowledge and expertise. Hence either they end up getting very cheap rates for their flats or very high rates that wards off tenants. Having a team of professionals gives them the extra edge in setting the right property rates that not only attract tenants but also ensure profits.
- Screening of Tenants: Every owner dreams of the ideal tenant who pays his dues, ensures minimum wear and tear, and causes no other issues. Selecting the right tenants requires a proper screening process that owners don’t have the expertise to apply by themselves. A property management company does the ensures there is a proper screening process for the tenants to ensure they are of high quality.
- Tenant Management: You have got your tenants; they have moved in your property. Now you expect to relax and wait for the rents to arrive. Not that simple. A responsible owner should ensure the tenants have all the basic amenities required as they move in. A Property Management Company will ensure this by Contracting with suitable vendors such as electrician, maid, plumber, grocery, WIFI for the daily needs of the tenants. Also, they will deal with tenant complaints and ensure proper payments are made at the month’s end. Also, they will initiate the eviction process if necessary.
- Less Legal Issues: Having a property management company backing you ensures that there is less risk of a lawsuit. They are responsible for a certain task that prevents you and your tenant from visiting the court:
- Ensuring property security.
- Initiate evictions if necessary.
- Administering and enforcing lease agreements.
5) Smooth Operation: Rest assured a property management company will handle the day-to-day expenses, maintenance, cleanliness, and security of the property. This saves a lot of time for the owner who is rid of all maintenance headaches and can then focus on his/her other obligations or expanding the business. For a wise man said, “Time is Money”.
6) Marketing Services: As mentioned before, most owners are new to the market and cannot have the expertise or resources to market their newly acquired property to the right channels.
A property management service would:
- provide an analysis of the rents that can be charged depending on the property condition.
- Advertising on various premium and other rental listings to attract potential tenants.
- Selecting the right tenants by a tenant selection process.
- Assisting the tenants in viewing the property and ensuring smooth conversion.
When Should You Hire a Property Management Service?
A good property management service can be the difference between success and failure for real estate investors. However, everyone does not need it. How do you know that you need such a service or not? Here are a few factors to consider:
Evaluate your budget. Property investment is made to reap profits. Make sure the charges of the property management service fit within that budget and ensure profitability. Most companies charge a portion of the fees, others have fixed packages with various features and perks. Make sure all things are accounted for while evaluating your budget.
As mentioned before, property management is a hectic job. Do you think you have the time and resources to manage it all? If not, a property management company is what you need. With their assistance and expertise rest assured you don’t have to worry about your investment and can freely attend to your other obligations. It saves on a crucial commodity “Time” for a wise man who once said, “Time is Money”.
Do you stay close to your property or are you live far away? If the latter is true it will be very difficult to address the day-to-day operations such as tenant issues, cleanliness, security, etc. In that case, having a property management company is very helpful.
Property managers can strike the right balance between time and money. If an owner does not have the time, expertise, or resources to manage all property-related issues, then a property management service is important for long-term sustainability and profitability.