Every landlord understands the burden that comes with the role. Whether you own one property or have a well-diversified portfolio with dozens of properties spread across multiple cities and states, you’ve seen firsthand just how time-consuming and problematic certain elements of landlording can be. Could a property manager solve all of your troubles?
What Does a Property Manager Do?
A property manager is someone who works for a landlord to handle all of the day-to-day details of keeping the property in order. This individual serves as an empowered liaison between you, the landlord, and your tenants. They keep things organized, take care of problems, and may even provide some strategic direction to ensure you’re able to maximize profits and retain the best possible financial advantages. A property manager can do as little or as much as you’d like. It all depends on your needs and preferences.
“Most property managers charge one month’s rent to procure a tenant and then charge a monthly management fee, either as a percentage of the rent or a flat fee per unit,” Realtor.com explains. “Fees can vary widely depending on the housing market. In general, though, management fees are 5% to 10% of a month’s rent.”
For landlords with multiple properties, there are often discounts on management fees and other expenses. However, price isn’t the only consideration. When choosing a property management service, you have to think carefully about what services and value is being offered in return. Certain companies, like Green Residential in Austin, Texas, offer guarantees for tenant placement and rental income. Any time you can find a property manager like this in your local market, you should carefully consider them. Financial security plays a key role in long-term success.
5 Key Benefits of Property Management
On a spectrum, property management falls somewhere between a necessity and a luxury (though it’s much closer to the former than the latter). Here are a few key benefits of hiring a property management service to oversee your real estate investments:
1. Thorough Tenant Screening
Property managers are highly skilled (and experienced) at screening tenants. They know what to look for, which factors indicate a high likelihood of success, and which red flags should be avoided. They also have a thorough understanding of the legality of screening, which will prevent you from unknowingly discriminating or performing illegal activities that could compromise the integrity of your investments.
2. Rent Collection
One of the least desirable aspects of being a landlord is having to chase down rent payments from tenants. Some will ignore you, while others will give sob stories and excuses. It’s a frustrating and depleting part of the process – something that requires a tremendous amount of intestinal fortitude and resilience. But with a property manager, you don’t have to worry about it. They handle rent collection on your behalf. That means you no longer have to be the bad guy!
3. Maintenance and Repair Coordination
Every landlord dreads the midnight phone call that a pipe has burst, or the Saturday morning text that the AC unit has stopped working. Something like this can ruin your entire day and require you to take time away from other professional and personal responsibilities. But with a property manager, you don’t have to get down in the weeds. They handle all maintenance and repairs on your behalf.
In slower rental markets, you need some sort of edge in order to charge healthy rent and simultaneously keep your units leased for the long-term. A good property management service will handle all of your marketing for you. This results in a steady supply of prospective renters.
Unless you have a background in bookkeeping, trying to keep all of your income and expenses straight is difficult – especially if you have multiple properties and investments. A good property management service will do your finances for you. All you have to do is occasionally review the books for accuracy.
Is a Property Manager Right for You?
While a property manager will cost you a percentage of your income, it’s one of the smartest investments you can make. Not only does it save you time and reduce the burden of stress associated with frequent repairs, late rent, and other issues, but it also has a positive impact on your financials.
With lower turnover and diminished vacancy rates, you can ensure your rental property continuously works for you for many years to come.