Many people want to rent their homes, whether it is single unit or multi-unit, especially when the rental market is good. Since all people want to live somewhere, renting a property is worth considering. A rental property brings monthly rental income as well as builds the equity on the property. However, most people do not want to run the rental business on their own. There are many hassles associated with renting a property such as finding tenants, collecting rent, making repairs, renewing the lease, moving tenants and so on.
Property Management Companies
A property management company comes handy if you plan to rent your investment properties. If you can find a great property manager, then you can rent your unit and collect the rent from the property manager. You will need to pay fixed fees to the property manager for his services. A typical property management company handles tenant management, rent collection and rent distribution.
Benefits of Hiring a Property Manager
There are many benefits to hiring and using a property manager.
• Higher Quality Tenants: A property manager will be able to find quality tenants. An experienced property manager can easily locate the best tenants. A good tenant always pays on time, keeps the rental unit without damages and might stay for long periods of time.
• Handling Legal Problems: If you have troublesome tenant, you could find yourself in the middle of a lawsuit. You will need to hire an attorney and go to the court to evict a bad tenant. If you have a property manager, then you can stay away from all the legal troubles. A property manager will handle tenant screening, evictions, inspections, lease management, managing security deposits and rent collection.
• Reduced Vacancy Cycles: A property manager helps the owner with finding the best tenant in the shortest possible timeframe. The property manager also determines the best rent for the current market conditions and markets the rental property via various avenues such as newspapers and online.
• Rent Collection Process: It is easy to collect the rent using a property manager. Most tenants pay the rent on time to a property manager versus the property owner. Further, property manager is well equipped to evict tenants if needed, as they are familiar with the laws and the processes involved.
• Less Stress for the Unit Owner: Hiring a property manager gives less stress to the unit owner, as the property manager will take care of all the daily and ongoing work associated with the property management. The owner gets to free up more of his time rather than dealing with the tenants.
• Reduced Maintenance Costs: A property manager can always find and negotiate lower rates on all repair work. A property manager knows the best contractors who can do a good job at a cheaper price. The property manager will always get the repair personnel on short notice.
• Records Management: A property manager also helps with managing the records for tax purposes. These include generating monthly statements to the tenant and the owner. Additionally, the property manager generates the 1099 form to the owner to record the rental income while filing the taxes.
Cost of Hiring a Property Management Company
You will need to pay the property manager with several types fees such as management fee, setup fee and leasing fee. It is important to understand what you pay and what services you are getting. For example, you will need to determine whether you want to pay a monthly fee for potential evictions. According to Greenlee Realty Group, a good property manager typically charges a fixed management fee for all services rather than nickel and diming the owner for individual services. The unit owner must recover the monthly payments such as interest, principal, HOA fees and property taxes after paying the property management fees.
Conclusion
Hiring a property manager is a no-brainer unless you have the time and energy to manage your rental property. You will need to find the best and experienced property management company to help you with the management of your property.
