Hiring a property management company is a significant investment for any landlord. Depending on your location and the services they provide, a property manager usually charges between 8% and 12% of the monthly rental value of the property. Some also charge an additional flat fee. This cost will undoubtedly affect the overall return on investment of your building. However, did you know that their services could also help increase your rental profits? Here are the many ways a property management company will help you maximize the income your investment property brings in.
- Reducing your vacancy rate
Vacancy is to be expected (and accounted for) in any rental property — the average US rental vacancy rate hovers around 7%. However, should your building sit empty for too long, your revenues will decrease rapidly while your expenses – including property taxes and mortgage – remain the same. A property management company can help reduce your property’s vacancy drastically. They advertise in all the proper channels, including some that are not accessible to the average landlord. They can also make sure that the transition process between tenants goes smoothly and quickly. Finding a new tenant is a numbers’ game that often involves showing the property to multiple potential renters before finding the right one. It is a time-consuming process, especially if you have other obligations. A company management company will have a system in place. This way, the tenant screening process, and visits go quickly to put all the chances on your side to fill the unit rapidly.
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Maintaining your property’s value.Property management companies are here to keep an eye on your property even if you live far away. They will run regular inspections to make sure that everything is running smoothly and that tenants are not causing significant damages. They will also take care of all the seasonal maintenance the landlord may not be aware off, from landscaping to snow removal if necessary. Besides, they have the required professional connections to make sure that the contractors hired for potential repairs are reliable. You can rest easy knowing that, not only your property will be taken care of, but that it also will be done right.
4. Protecting you legally
Property management companies are familiar with the local laws and regulations related to renting and building safety. They will help you stay clear of potentially expensive lawsuits that could haunt you for years on hand. From lease agreements to property code and tenant relationship, they will ensure that your building is safe and your interests secure. They can help you draft a foolproof lease. They will also help you get rid of undesirable tenants quickly and professionally, staying clear of these horror stories you may have heard about. A property management company can also help you with your taxes related to your rental property. It could potentially save you a lot of fiscal woes if you are not familiar with the particulars of deductions and write-offs.
5. Monitoring rental rate trends
Deciding on the monthly rent for your property building is a tricky business. If it’s too high, your building may stay vacant, and you could lose a lot of money. If it’s too low, you will have issues covering your expenses and your rental profits will be lower than what you should get. There is no secret recipe for establishing the perfect rental rate. You need to continually monitor your competition and keep an ear to the ground to be aware of any changes. Real estate is, by nature, a fragmented market. If you don’t live locally, or if real estate is not your main activity, you may have issues deciding on how much you should charge your tenants. A property management company can help you with that.
6. Improving your real estate investment portfolio
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Maximize your free timeLast but not least, hiring a property management company is the best way to take a hands-off approach to real estate investing. Knowing all there is to know about a property and managing the daily running operations is time-consuming. You need to educate yourself about the latest real estate trends, screen tenants, collect rent, and dealing with routine maintenance, among other tasks. You may have a day job which keeps you busy, or a family you want to spend time with. You may want to travel the world without having to worry about a phone call from one of your tenants about a broken furnace. Either way, time is money, and dealing with the nitty-gritty of property management may not be the best use of yours.
If you would like to know more about what we can offer you to maximize your rental profits, check out our website. We are always happy to answer any question you may have.
