Is a property management company worth it? Here’s a complete guide to hiring property management services to determine if it’s the right move for your rental property.
6 Compelling Reasons for Hiring Property Management Services
Not all landlords or owners need to hire a professional service to take care of their rental property. However, given the many advantages of hiring a rental management company, it can provide you with a better return on investment (ROI). If you’re still on the fence, here are some compelling reasons for hiring property management services.
1. You Have a Vast Rental Property Portfolio
Managing a single rental property is already hard enough, what more if you had several rental properties? A residential property manager can ensure that each of your rental spaces receives the proper care and attention that it needs.
2. Your Rental Property Is Underperforming
It takes time to learn the ropes of rental property management. If you’re a first-time investor, you may have difficulty getting the results that you want. A property manager can help you determine the best rental rates and ensure that your units are fully occupied. As a result, you can generate more passive income and better ROIs.
3. You Live Too Far from Your Rental Property
It’s hard to be a good landlord if you live far away from your rental property. Driving back and forth each day can be very inconvenient. It also makes it hard for you to respond to emergencies or urgent situations. If you want to become more responsive to the needs of your tenants, consider hiring a professional for apartment management services.
4. You Still Have a Full-Time Job
For property owners who still have full-time jobs, it’s virtually impossible to also become a landlord. Landlord duties and responsibilities are never-ending and you’ll have to deal with tenant concerns or complaints 24/7. If you do not have the time or energy to spare, it’s much better to have a rental manager take care of your investment property.
5. You Lack Property Management Expertise
There’s more to being a landlord than collecting rent. You need to have a specific set of skills to be able to market your rental space properly, manage finances accurately, and understand the technical aspects of maintenance, among many others. Rental property management companies can take care of everything and thus, relieve you of the burden of having to learn all these tasks on your own.
6. You Don’t Have a Network of Professionals to Call On
One advantage of hiring a property management company is that they already come with a vast network of professional plumbers, electricians, carpenters, painters, and contractors. If there’s an issue with your rental property, all they need to do is get on the phone with their go-to guy. This is much more convenient and efficient than you, personally, having to find a handyman. It’ll take a lot of time to vet their qualifications, as well as ensure they are fully bonded and licensed,
What Does a Property Management Company Do?
Now that we’ve established a need for property management services, it’s time to clarify exactly do these property management companies do? If you’re wondering what’s included in property management services, here’s a rundown of the essentials.
Setting and Collecting Rent
Rent is one of the most important aspects of property management. A property manager must be able to calculate a competitive and reasonable rental rate for your property. They also handle rent collection each month to ensure a steady flow of income.
Tenant screening is another core property management service. A property manager is tasked with finding the most qualified tenants for your rental space. They should know how to perform a thorough background check to see if a prospective tenant can pay rent on time as well as take good care of your property.
For many landlords, financial management is the deciding factor in hiring property management services. Without an adequate financial background, it can be difficult to create budgets, track expenses, maintain financial records, calculate tax deductions, and handle security deposits. Owners can rest easy with a manager handling the financial aspects of property management.
Rental Property Marketing
Marketing is included in services that you can expect from your property management company. They will create a solid marketing plan to attract prospective tenants to your rental property. This includes offline marketing strategies, such as print ads and fliers, as well as digital marketing strategies — which include online listings, social media advertising, and content creation.
Maintenance and Repairs
Some property managers also handle maintenance and repairs while others call on handymen to get the job done. Whichever option they choose, a property manager is responsible for handling tenants’ maintenance requests. It’s their responsibility to ensure that your rental property is safe, habitable, and well-maintained. As such, property management services also typically include routine inspections from the manager.
Rental Market Analysis
Property management companies may also offer rental market analysis in their service offerings. A property manager can assess the condition of your rental space and compare it with similar properties in the area. With a better understanding of your rental property, you can implement strategies that will allow you to stay on top of the competition.
What to Look for in a Property Management Company
Apart from a wide range of property management services, make sure to choose a property management company with the following:
Licenses and Certifications
Look for a property management company with licensed professionals. Depending on your state, a property manager is required to have either a real estate broker license or a property management license.
If you live in one of the few states that do not have license recruitments, you still need to make sure that your chosen company is qualified to perform property management services. Look for certifications from reputable organizations such as the National Association of Residential Property Managers (NARPM) or the National Property Management Association (NPMA).
A Proven Track Record
Years of experience is another qualification to look for in a property management company. An established company should have no problem providing you with references to showcase its excellent track record. If a company refuses to hand out references, it could be a sign that former clients were not satisfied with their property management services.
Insurance and Legal Protection
A property management company should have adequate insurance coverage in case there are issues with their managers or services. Ask if they have general liability insurance, professional liability insurance (also known as errors and omissions insurance), property insurance, workers’ compensation insurance, among others. The more protected the company, the more you can avoid potential liabilities and legal issues.
A Cancellation Policy
A cancellation policy is a must for any property management contract. Both the property owner and management company should be able to cancel the agreement in case of negligence or violation of contract terms. Look for required advance notice and termination fees in the provisions of the cancellation policy.
Frequently Asked Questions About Property Management Services
Still need more information? Here are the answers to frequently asked questions about property management services.
What Is Included in Property Management Services?
Not all rental or condominium property managers perform the same services. It depends on the terms of your contract. Most property management companies have different packages to suit the specific needs of owners. The range of services may also depend on your budget or the agreed-upon property management fee.
What Does Full Service Property Management Mean?
Owners who opt for full-service property management can expect their property managers to perform a wide range of services — including tenant marketing and screening, rent setting and collection, evictions and legal services, accounting, bookkeeping, and so on.
Some owners who want to stay involved with their rental property may prefer to have a part-time manager or choose to have essential or specific services such as tenant screening and financial management.
What Do Property Management Services Charge?
Management fees will depend on your agreement with a property management company. Most companies will charge either a fixed monthly fee or a percentage of monthly revenues. They may also charge for additional services such as tenant placement, vacancies, maintenance, evictions, and other miscellaneous fees.
Can You Negotiate Property Management Fees?
Most property management companies are willing to negotiate fees with potential clients. However, keep in mind that lowering fees may also mean more limited services. Choose a property management company that can provide the services you need at reasonable prices.
Finding the Best Property Management Services for Your Rental Space
This property management services guide aims to provide owners with all the information they need to get started on the search process. Finding the best property management company will take some time and effort. Make sure to utilize different avenues such as personal recommendations, customer reviews, and online directories. With this comprehensive guide, you’ll be able to determine if a company can provide the property management services that your rental space needs.
Need help with the search? Feel free to check out Rental Choice’s online directory to help you find the best property management companies in your area.
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