Anyone who owns rental property knows that managing a property can be time-consuming and stressful. Many landlords also realize that hiring a property manager can save them money, time and headaches.
A property manager offers valuable experience, which allows them to quickly identify potential problems and thoroughly examine potential tenants through a screening process. Generally, a property manager produces a more solid candidate – someone who pays their rent on time, rent the property for a longer period than average, treats the property with respect and follows the lifestyle rules.
The property manager’s responsibilities include many aspects of leasing and maintenance such as marketing a property, screening potential renters, collecting rent, addressing tenant complaints or property issues, and managing property maintenance and repairs. They take care of the less pleasant tasks of evictions and legal concerns, too. Additionally, hiring a property management company reduces the possibility of scams and discrimination lawsuits.
Although hiring a property management company has many advantages, costs are involved. Typically, the property management fee ranges between 5 percent and 10 percent of collected rent.
How do you know if it is time to hire a property management company? Consider the following questions when evaluating your situation.
- Do you own several rental units or properties? The more rental properties you own and the more units they contain, the more you will benefit from hiring a management company.
- How much time are you spending managing your properties? Property management requires time, energy and desire. Choosing to invest in property does not mean that you have time to manage that property – or that you want to manage property. Ask yourself, do you have the time to manage your rental properties? Would you rather spend that time looking for new properties or having that time to yourself?
- Do you live out of the area or out of state? If you live out of the area, out of state or out of the country, then hiring a property management company is a great solution. The property manager will handle issues that surface from the garage disposal back-up to unpaid rent.
- Do you want to be an employer? If you hire a resident manager or other employees to help with your property, you become an employer. In choosing this path, your commitment and workload just increased. You will handle payroll and payroll taxes, offer sick time in accordance with local and state laws and more. The upside of hiring a property management company is that the leasing agent or maintenance professional is not your employee.
- Does the property fall into an affordable housing program? Usually, in exchange for participation in an affordable housing program, a landlord will receive financial assistance, such as a low-interest loan, tax credits and in some cases a grant. The landlord agrees to lease to tenants that earn below a designated income level and to comply with specific rules. Because participation in these programs can be complicated, the cost of hiring a property management company often is offset with the benefits of being a part of the program.
Murfey Company, a leader in real estate development and construction, offers property management services. To learn more, visit www.murfeycompany.com