Renting out a property is a great way to make a living and generate a steady income. A landlord must have good tenants that pay their rent on time and don’t damage their units. Hiring a property management company can be one way to better you chances of that happening.
If a landlord has a problem tenant, managing and owning a rental property can become difficult and time-consuming. A professional property management company can provide many benefits to landlords, particularly if they own multiple properties. These benefits can save landlords time and money, and make renting a property more rewarding.
There are different types of property management. So before you start hiring a property management company, let’s take a quick look at two of them – residential and commercial.
What is Residential Property Management?
The owner’s residential property manager manages an income-producing property. Commonly, residential properties include single and multi-family homes, condominiums and townhomes as well as apartments.
A residential property management company manages all aspects of the marketing and leasing of vacant properties. They also handle the day-to-day maintenance of the property. A residential property manager will manage all aspects of tenanting a building, including analyzing the area and setting rental rates, showing it to potential tenants, qualifying their applications, and negotiating the terms and conditions of the lease.
Contrary to commercial properties which have longer lease terms, residential properties tend to be more turnover-friendly. Most leases last between 6 and 12 months. Marketing, showing, and leasing are all important parts of residential property management.
What is Commercial Property Management?
Commercial property managers manage non-residential properties such as offices, retail spaces and storage areas, shopping centers, and industrial buildings. Commercial property management is similar to residential property management. It involves the management of income-producing properties.
Being able to prioritize and complete a variety of tasks is essential for commercial property management. The commercial manager’s job includes marketing, advertising, and leasing. Commercial leases are typically longer than other properties with built-in renewals. (For example, A five-year lease, with the option to renew) and rent escalations. Both marketing and lease negotiations for commercial properties are more complex than other types of property management.
Commercial property managers are less involved once the space has been leased than other managers. Many commercial tenants of spaces, such as offices, retail units, and industrial suites, take care of general maintenance and, in some cases, design and personalize the interior to fit their business.
The Benefits of Hiring A Property Management Company
A property management company can manage all tenant screening activities. This is one of the greatest benefits. Many landlords don’t run background or credit checks due to lack of time or inability to find the reports.
Tenants who rent to people without considering their financial history and criminal backgrounds are a sure way to get into trouble. The entire screening process is managed by property management companies so landlords can get tenants who pay on time and take better care of their units than those who weren’t screened.
Landlords must collect rent on time each month to pay property taxes and other expenses on time. A landlord’s only chance to earn a reliable income is to collect rent on time. Some landlords don’t have the control they need over rent collection. Some landlords will sometimes allow tenants to pay rent late under extenuating circumstances. Sometimes tenants will use bad checks to pay rent, and the landlord ends up paying bank fees and other costs.
This entire process is managed by property managers so landlords don’t have to deal directly with tenants who refuse to pay rent according to the agreement. A property manager will contact late-paying tenants until payment has been received. A property manager may initiate the eviction process if a tenant fails to pay rent as agreed.
Property managers also have to address tenant-related issues. Property managers will address any issues that arise when renters default on their payments or violate the terms of their lease agreement. This could mean collecting late payments or handling the eviction process. The lease agreement will usually outline how managers should deal with repeat offenders or broken rules.
Tenants who violate the lease terms will be dealt with by property managers. The property manager will notify the tenant if a tenant has pets, and request that they remove the pet within a specified time frame, if pets are not allowed under the lease agreement. The property manager can ensure that repairs are paid for by the tenant if the tenant damages the wall or makes any other modifications to the property that were not agreed upon by the landlord.
Bookkeeping and Invoice Management
It would be difficult to find an investor who enjoys bookkeeping. Management companies can take this responsibility off of your hands as well as handle invoices. Some companies offer this service at no cost, although it is worth paying for. Managers can reduce taxes and protect important documents, which will save you money and prevent costly errors.
Property management companies provide regular maintenance for properties. The property stays in top condition thanks to their preventative care. They also respond to clients’ requests. They might also recommend investing in property improvements, such as new landscaping or other improvements. Although upgrades can be expensive, maintaining a property in good condition and keeping it updated can make a difference in the long term.
The manager can hire personnel to fix any issues that arise in the unit. Property management companies may also arrange maintenance such as painting, patching, or repairing drywall and fixing appliances.
If you don’t make your property more inviting, people won’t want to visit it. If you do, your property will be more appealing and more attractive to people. This will increase its appeal and attract more people over time.
What are the best reasons for hiring a property management company?
Landlords can have their burden reduced by hiring a property management company. Here are some reasons to hire a property manager to manage your real estate.
- Landlords may own several properties. You can deal with more tenant issues faster with a property manager.
- It is difficult to manage your property. Being a landlord requires a lot of work and time. You can free up time to handle other tasks by hiring a property manager.
- You don’t live near your rental property. A property manager can help you deal with issues far away from your home.
- You have limited time. A management company could be the best way to save time if you want to grow your business by looking for properties, financing renovations or restructuring your business.
- You don’t want to be involved in managing the property. Many landlords enjoy the challenge of finding tenants and the satisfaction of managing a safe and attractive property. If you see rental property ownership as an investment and don’t want to be involved in the management of your properties day to day, then hiring someone to help you manage it is a good option.
- The cost is affordable. If you can afford the costs, hiring a property management company is an appealing option. Expect to receive quotes between 5%-10% of the rent you receive. If you can manage the situation yourself, or with the assistance of other employees, you may want to continue doing so until things improve.
A quality property management team is a valuable asset for residential or commercial landlords. You can see that the cost of hiring a property management company is worth it.
The property management company will not only take care of the property operations but also help the owner reach their financial goals. Whether you are buying your first rental property or already have a diverse portfolio to manage, an accredited property management company can be a sign of excellence in property management.