As a landlord, one of the major decisions you will have to make is if you need to hire a property management company. Quite a few landlords manage properties themselves or with the assistance of an employee like a resident manager. However, on certain occasions, landlords need additional help, and that is when the need the help of a property management company.
Such companies, despite the high prices they command, can be a huge asset to your business. In addition, there are other factors why you might need or might not need one. Review the issues discussed below carefully to ensure if hiring a property manager is beneficial for your business.
What Does the Property Management Company Do?
These companies deal directly with tenants and prospects, saving you worries, energy, and time over collecting rent, responding to complaints by tenants, handling repair and maintenance issues, marketing your rentals, and pursuing evictions too. In addition a reputable management company brings its experience and knowledge to your property, giving you peace of mind with the knowledge that your asset is in safe hands. Finally, you elude the bothers of being an employer, as the management company is an independent contractor.
When You Should You Hire a Property Management Company?
Although there are many advantages of hiring a property management, they are quite costly. In addition to this, not everyone can depend on a property management company. Contemplate the following factors to make sure if hiring a property management company would be good for your business.
You should consider hiring a property management company if:
You have lots of rental units or properties. You are more likely to benefit from a management company if you have lots of rental properties and they contain lots of units.
You do not stay close to your rental property. If you live far from your rental property, it can prove invaluable to hire a property management company for dealing with the numerous issues, which you will not be able to manage from afar.
Hands-on management is not your cup of tea. Many landlords look ahead to the rewards of maintaining an attractive and safe property and the challenge of finding good tenants by themselves. However, if you think about rental property ownership only as an investment and are not interested with your property’s day-to-day management, consider hiring help for managing your property.
You have limited time. You may not have enough time for your business, particularly if your daily job does not consist of landlording, even if you love hands-on management. If you would rather spend your time to develop your business, which includes arranging financing for renovations, hunting for new properties, or even changing the structure of your business, then you stand to gain by investing your money in a management company.
You can afford the cost. If you can afford the fees, it is an attractive option to hire a property management company. When interviewing such companies, anticipate to hear quotations ranging between 5% and 10% of what you collect as rent revenue. If the market is down and you can manage things on your own (or with the help of other employees or a resident manager), you may want to continue with the process until the market picks up.
You are suddenly flooded with management tasks. In case your business is growing, at one point or the other, you may realize that you require a considerable amount of assistance to manage everything properly. At this juncture, it is sensible to hire a management company.
You do not want to be an employer. You become an employer if you hire other employees or a resident manager to help with your property. You will need to handle payroll as well as deal with a host of other legal considerations and requirements. However, since the property management company is an independent contractor and so are the people working for it, they are not your employees and you can avoid the hassles of being an employee by using them.
Your property is a segment of an affordable housing program. Things can get complicated if you take part in an affordable housing program. In these programs the landlord usually receives financial assistance, which may be like tax credits, loan with low interest rates, or a grant, in lieu of consenting to rent as a minimum a portion of the property to tenants who earn below a specific income threshold. The landlord must fulfil a complex set of rules so as to keep on receiving the assistance. More often than not, hiring a property management company having experience and expertise is worth it, when there is so much at stake, with the specific housing program concerned.