An important question that most of the property owners face at some point; to hire or not to hire a property management company? This arises when they decide to put their property on rent or when their expanding their investments in real estate industry. There are always a number of pros and cons to any decision they take depending on individual’s situation. But before we get into that, let’s know about Property Management Services in detail.
What is a Property Manager?
A Property Manager is a third party who is hired to manage the day-to-day operations of your real estate investment. There are different types of property a property manager can manage, from single homes to multi-unit residences.
Many property management companies handle most of the issues from marketing your rental property to collecting rent. Well, there are also some which look after most of the daily work leaving some decisions or tasks to the landlord. The duties of a manager completely depend on how the relationship is negotiated.
A property management company does the following (the list is not exhaustive):
- Advertising your property
- Screening tenants
- Attending prospective tenants
- Setting, collecting and adjusting rent
- Handle lease agreement
- Manage maintenance and repairs
- Dealing with evictions
- Complying with the state and federal law
- Filing or assisting in filing taxes
Why consider hiring a property manager?
There might be several reasons for a property owner to hire a manager for his/her rental properties (again the list is not exhaustive) –
- The rental units have grown too beyond owner’s ability to manage
- The property is in another city or state or country
- The owner does not want to get into daily task of managing a property
- Too caught up with his/her full time day job
Like, if you are staying in Delhi and have invested in a property in Mumbai, it is advisable to look for Property Management Services in Mumbai.
In any of the cases, pros and cons should be considered of hiring a property manager.
Pros of hiring a property management company
There are a lot of positive reasons to hire a property manager and most of it revolves around the need to have an experienced party to save the landlord’s time on a long list of rental related issues.
- Filling the vacancy – It is part of their duty to advertising the vacant property
- Tenant sourcing and screening – Most property management companies have a time tested system to screen tenants, which ensures quality tenant for your property
- Researching the market and setting the right rent – Optimum rent ensures that your property is not vacant for a long time and it is not less that you are paying for maintenance out of your pocket
- Managing vendor relationships for regular maintenance and repairs – As they have number of properties to manage, either they have in house staff or they have fixed vendors to get the work done
- Reduced management responsibility – From advertising to rent collection, from repairs to evictions, everything is managed by the Property Management Company
- Fewer legal issues – Being experienced in the industry, they are well aware of the law and how to avoid a legal issue on the property
- One point of contact for all the tenants – For any issue, repair or maintenance work tenant just need to contact the manager and if you need any update on the rent collection or any other update about the property, it is them who is to be contacted
- Eviction process is lot easier – If you have a troublesome tenant, it is a tedious task to get your property evicted, however managers being in the industry for quite some time knows how to handle such tenants
- Reduced tenant turnover rate – Since the requirements of the tenants well taken care of and the property is well managed, tenant will not like to shift, until necessary
- Improved service and better response time to the tenants – It is property managers job to attend to tenant whenever required
- Experience in the industry – Their experience can help you in more ways than you imagine, be it finding the right tenant to rent collection issues to legal and tax issues, they are a pro
Cons of hiring Property Management Company
There are also always two sides of a coin, so despite all the benefits of a professional property manager, there are negative aspects of it too.
- A property management company manages dozen or may be hundreds of property, so a property may not receive the same level of attention as might under the owner himself.
- Property Manager is paid to make decisions, however those may not be the same as you would make.
- Hiring a manager can save you time, however, they also can reduce your investment income because of their high base rates or the percentage they charge on the gross rent collection