The Top 10 Reasons to Hire a Residential Property Management
Company
| By Michel Lautensack
|
Republish: EasyPublish ™
Published: 22Jan2008
Word count: 747
Viewed: 4358 time(s)
|
Once
you have invested in a rental property, the responsibility of
maintaining and running the property can quickly become
overwhelming. For many Owners, the logical solution is to hire a
Residential Property Management company to oversee their rental
property. But is this the right decision for you? Here are the top
10 reasons to consider why you should hire a residential property
management company and how the benefits far outweigh the costs.
1) Rent
Collection: A professional residential property
management company ("PM's") have systems and strategies to improve
rent collection and on-time rent payments. This allows you to
ensure swift and consistent rent collection. Quick and consistent
rent collection is absolutely critical in this real estate market
where good cash flow can mean the difference between success and
failure as a real estate investor.
2) Local Knowledge of
Rental Rates: PM's have extensive local knowledge
of rents and the ability to determine the highest rental rate
possible for your property. With the internet and the ability to do
large scale searches for rental properties, potential tenants know
if your property is overpriced, even by $25. Overpriced properties
sit empty while other properties get rented. Knowledge of rental
rates is a key factor to fast rentals and quick cash flow.
3) Tenant
Screening: A PM requires a detailed written
application from each adult with photo identification.
Additionally, PM's will run criminal, social security and public
notice (bankruptcy or judgments) searches to determine if the
application is accurate. PM's will also call past and present
employers, landlords and other references. PM's have set
requirements and standards for accepting or declining an applicant
and thereby ensuring you comply with fair housing rules and other
local and state regulations.
4) Marketing
Expertise: PM's have years of experience in how to
best market your properties so they are rented in the quickest time
possible. PM's use both offline and online marketing to maximize
your properties' exposure and find qualified tenants quicker. Most
PM's utilizes 10, 20 or even 30 different techniques to rent a
property quickly which reduces your carrying cost of a vacant
property.
5) Property Law and
Regulations: PM's have extensive and up-to-date
knowledge of property laws and regulations and will assist you in
making sure you are in compliance with your local, state and
federal rules and regulations. These rules and regulations include
complying with fair housing regulations, the Americans with
Disabilities Act and other applicable local, state and federal
laws. Avoiding one law suit will more than pay for any PM's fees
many times over.
6) Tested and Reliable
Professionals: residential property management
company's will already have vetted numerous vendors, suppliers and
contractors to make sure they provided good quality work at
reasonable prices. Failure to properly vet these professionals can
be a costly mistake. Many Owners overlook this function because
they do not know how to do it or because it is a time consuming and
laborious process.
7) Inspection
Reports: PM's perform property inspections before,
during and after a tenancy. Additionally, most PM's will perform
routine property inspections at least every 180 days. Your PM
should be responsible for preparing frequent written inspection
reports for each of your properties. Faults in your property that
are found quickly can be resolved before they become expensive
items of disrepair.
8) Financial Records and
Security Deposit Escrows: PM's will provide
detailed income and expenses reports as well as cash statements
every month saving you the bookkeeping headache. Additionally, PM's
will also manage your security deposit escrow funds and make sure
you are in compliance with local and state regulations. PM's will
provide end-of-year tax reports for your accountant or financial
advisor.
9) Emergency Calls and
Shield You From Tenants: A residential property
management company will shield you from emergency maintenance calls
and tenant headaches. Imagine never having to deal with late night
"my toilet is overflowing" call.
10) Low
Costs: A PM should only be charging around 6% to
10% of the monthly rent collected. Assuming a monthly rental rate
of $1200 per month that is a fee of $72 to $120 per month. This is
less than $4 per day! Can you possible do all these things for less
than $4 per day?
11) Bonus Reason! FREE
TIME: A good residential property management
company will free up your time for doing deals that make money. I
mean serious money as opposed to dealing with non-money producing
activities like tenant and property management.
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