As a real estate owner, you enjoy certain perks, such as a steady passive income stream. But before getting to this point, you need to decide how to carry out the daily running of your property. The two options here are to self-manage and oversee everything from searching for tenants, handling tenant contracts, collecting rent, and overseeing repairs and maintenance. You can also choose to hire a professional property management company that can provide property and association management services.
However, deciding whether to hire a professional property management company can be extremely confusing because of the mixed reviews of other real estate investors. Because deciding this isn't straightforward, here's a detailed look at the pros and cons of hiring a professional property management company. As a result, you'll be better placed to make an informed decision.
Pros Of A Professional Property Management
Hiring professional property management firms like Rooftoprentals.net may greatly help you manage your rental property. To guide you furthermore in deciding whether to hire one or not, here are some of the benefits of property management you should know:
As a rental property investor, you'll at one point in time deal with a problematic tenant who causes you to suffer great financial and legal headaches. And because you're less familiar with the newest landlord-tenant laws, you may not be in a position to know how best to protect yourself from being victimized. The best way to avoid such a scenario would be to hire a professional rental property management company to manage your property.
Hiring such a firm protects you from possible lawsuits because they're well-versed with the landlord-tenant laws that differ from one state to another. They also carry out other aspects that reduce your exposure to potential lawsuits, such as:
Your primary motivation for investing in real estate is to make money. Therefore, the last thing you want is for your rental property to remain vacant for an extended duration. This eats into your possible profits, thereby reducing the viability of your investment property. An effective way to avoid this is by hiring a professional property manager. They can accomplish this thanks to the experience and resources at their disposal that help them quickly find potential tenants.
Some of the techniques these professionals use to ensure shorter vacancy periods include:
Doing all this will be a challenge if you choose to run your rental property's day-to-day activities personally.
Tenants aren't created equally because some observe the renter-landlord agreement by always ensuring they pay on time and take great care of your property. However, others aren't as good and end up being a liability. Because of this, there's a need for proper tenant screening to avoid landing yourself a bad tenant. But the screening process is usually complicated and time-consuming; hence proves to be a challenge to handle as a real estate owner.
Fortunately, property management firms boast great knowledge and experience of the real estate market; hence tenant screening is a breeze. They accomplish this thanks to a comprehensive screening process that helps them pinpoint good tenants who'll:
Making sure they only get such tenants is possible because of their experience, which helps them detect red flags about a potential tenant. In addition, leaving the screening to a property management company protects you from discrimination lawsuits targeted at rental owners by devious individuals posing as potential tenants. As an untrained landlord, this may happen when you tell tenants they're an inappropriate fit or ask discriminating questions.
The best way to prevent such scams, lawsuits, and bad tenants is by outsourcing the running of your rental investment to a property management company.
It's one of the most crucial services a property management company offers because operating your rental property without the rent will become a challenge. And while it's easy to assume rent collection is a straightforward process, this is far from the truth. This is why it's advisable to hire a property management company to set up an efficient rent collection and late payment system as well as ensure renters pay on time.
Getting the services of a property management company also acts as a buffer between you and the renters. This is especially crucial if you're soft-hearted because a tenant can easily manipulate you by giving you excuses for delayed rent payments. Should you fall victim to this, you'll then have to chase down the tenant for rent payment and eventually need to evict them from your rental property. You can avoid all this by hiring a property management firm because they're stricter at enforcing the agreed-upon lease terms.
Managing a rental property is not an easy job. Therefore, it's best to leave it to a professional property management company and enjoy certain advantages such as:
Cons Of Professional Property Management
While professional property management does indeed have certain benefits, there are also certain downsides that you need to know about, including;
This is no doubt the main downside of professional property management that scares off many rental owners. How much you pay for management fees usually differs and ranges between 4% to 12% of your total rent collection. This steep price is often attributed to the peace of mind you get to enjoy by giving your house to a professional property manager. You might also be charged other costs, including:
Other less common fees you may be charged if you opt for professional property management include renewals, extra maintenance, cancellation, and miscellaneous fees.
The rental property is, without a doubt, your asset. However, professional property management companies prefer that you don't get involved in the daily running of your investment once you hire them. After all, they've already got the systems in place to handle any issues that do arise, such as maintenance problems, minor tenant issues, and other small issues. But if you want a hands-on approach, then professional property management might not be an ideal option.
Because rental properties aren't cheap, it's normal for the landlord to want a lot of care to be taken with your investment. This can't be achieved if you hire a property management company. As a result, they might not handle any arising issue with the same intensity as you would have. In addition, they aren't ideal if you want to establish a great relationship with your tenants. This is because they expect you not to be involved in any of the day-to-day activities of your rental property.
Managing an investment property is not an average task, and this is why you need to work with a professional property management company. However, you mustn't make this decision hastily without first taking note of the possible benefits and downsides of working with them. And to further enlighten you, this detailed guide has outlined the pros and cons you need to know about when working with a property management company.