Renting out your property is a great way to make additional monthly rental income for yourself. You may not be familiar with what a property management company does when it comes to placing tenants in your property and managing your property for you. Below is a list of 11 reasons to consider using a property management company to place tenants in your property and manage the property for you.
If You Live Out of State or More Than 30 Minutes from Your Property: Almost all cities require a rental license on your property (an application, certified inspection, and proper posting).
So You Don’t Have to be the Bad Guy: 70% of a property manager’s time is spent enforcing your lease and chasing down your rent. If imposing late fees, late night phone calls regarding noises, and sorting through excuses of why tenants didn’t pay their rent isn’t your idea of spending your nights after work, then you need a property manager.
If You’re Not Handy: If you know you’re not handy around the house with leaks, squeaks, and clogs, you will spend more time than you think calling and coordinating maintenance requests. Property managers have professionals in place around the clock, usually in house or at a deep discount, saving you time, money, and hassle.
Make More Money Doing Something Else: Dealing with your property will take time and energy away from your day job. Property managers spend their days and nights dealing with all issues relating to rental real estate – do you? What if a tenant poses a question you don’t have the answer to, where do you turn next?
Knowledge of the Rental Market: Property managers have extensive local knowledge of rents and the ability to determine the highest rental rate possible for your property. With the internet and the ability to do large scale searches for rental properties, potential tenants know if your property is overpriced, even by $25. Overpriced properties sit empty while other properties get rented. Knowledge of rental rates is a key factor to fast rentals and quick cash flow. If you go vacant for one month, you might as well have accepted $100 less per month, on average! Property managers help you maintain and achieve the highest possible return on your investment. They will provide you with the knowledge of what repairs are necessary, and what repairs are a tenant’s way of punishing you with petty requests.
Property Law and Regulations: Property managers have extensive and up-to-date knowledge of property laws and regulations, and will assist you in making sure you are in compliance with your local, state, and federal rules and regulations. These rules and regulations include: complying with fair housing regulations, the Americans with Disabilities Act, and other applicable local, state, and federal laws. Avoiding one lawsuit will pay for any property manager’s fees many times over. More often than not, a property manager can handle an eviction without the use of an attorney as they are up-to-date on current laws and legislation regarding housing court and possession of property.
Financial Records and Security Deposit Escrows: Property managers will provide detailed income and expense reports as well as cash statements every month saving you the bookkeeping headache. In addition, your property manager will also manage your security deposit escrow funds, make sure you are in compliance with local and state regulations, and provide you with an end-of-year tax report for your accountant or financial advisor.
Low Costs: Property managers offer low cost monthly management fees.
Free Time: A good residential property management company will free up your time so that you can focus on other activities. Do you have two days to spend at a court house? Most evictions, however rare, can require you to spend two half days at the court house filing complaint orders, process servers, plus lengthy court appearances.
Payment: Tenants are more likely to pay on time if a professional is managing the property because systems are in place to collect rent, enforce late fees, post notices, and even report to credit bureaus or refer to collections.
Tax Deduction: Fees paid to a licensed property manager are considered professional services and entirely tax deductible.