Real estate is a great place for investment, with rental properties all the more
appealing since they generate income for you. Many first-time real estate investors attempt to manage their investment properties by themselves at first, but ultimately decide to hire a professional property management company to handle the maintenance for them. This allows you to purchase more property than you could feasibly handle on your own, a prerequisite to establishing your real estate empire!
Even if you only plan to own a couple of rental properties, professional property management services can make financial sense. The best of the best provide value above and beyond merely collecting rent every month, such as navigating any legal issues that arise, locating tenants, and handling the daily chores associated with property ownership.
Here are additional details on the top five reasons a property management service is a right choice for your rental properties.
1. Rent Collection & Evictions
Rent collection isn’t the only reason to bring in a property management service, but it is one of the best ones. Ideal tenants who pay the rent on time every time are preferred, but even tenants who pass rigorous background and credit checks can fail to live up to this. Some lie during the initial screening process, and others fall behind due to circumstances outside of anyone’s control.
Landlords are legally entitled to their money in these situations, but a long and arduous process is usually required to get it. Evictions are even more of a hassle, as handling the situation in full compliance with both state and local regulations requires more expertise than the average landlord possesses. You could take the time to study up, but is that worth it?
You may still miss something even if you think it is. A qualified property management company will spare you from dealing with truant rent and evictions notices, freeing you to deal with more important concerns.
2. The Knowledge To Do The Job
Crazy stories are often the result of renting a property out. One woman covered her entire apartment in tin foil, creating a terrible mold infestation. Another somehow managed to set a property on fire using only a mattress. So many things can go wrong that you’d be insane not to have an experienced expert on your side.
This does not mean that all property management services are equal, as many discount firms don’t have any more knowledge and experience than you do. Failing to follow the proper procedures in bizarre circumstances can leave you liable for any damages they cause, including shoddy electrical work, improper asbestos removal, or fires started by an illegal buildup of debris. You do not want that to happen.
3. Legal Issues
It was alluded to above, but the legal codes pertaining to renting properties are among the most complex on the books. Fair Housing Laws dictate what you can and can’t do, while additional property management regulations vary by state and even principality. A competent property management company will know all of the laws and how they affect the properties you own, so you’ll never need to worry about running afoul of any of them. You’ll also have immediate access to any necessary paperwork, a vital technicality frequently overlooked by those trying to manage a property themselves.
Screening prospective tenants is another activity with a lot of legal red tape, but a property management company will be able to help you through the process. This includes credit checks, background checks, and any other miscellaneous issue that may arise, so all of your bases will be covered.
4. Day-to-Day Maintenance
Landlords are legally obligated to take care of any issues tenants find with a property as they happen, but most would prefer not to be contacted at three in the morning to deal with them. Landlords investing in rental property also have their own lives to live, encouraging them not to spend their free time cleaning gutters or mowing the lawn. Outsourcing these tasks to a property management company allows you to live your life the way you want to.
You also need to consider how many properties you can realistically manage yourself if you try to go it alone. One or two might fit into your schedule, but how would you manage 20? A professional property management service is a requirement if you want to own a lot of properties spread across multiple areas.
Finally, tax deductions and other financial benefits are available to landlords, but your accountant may not take advantage of them to their fullest potential. Property managers can advise you on what you qualify for and even provide the requisite paperwork to claim it.
Vacancy can quickly turn a profitable real estate investment into a money pit, so it behooves you to fill any vacant dwelling with a new, qualified tenant as fast as possible. Experienced property management firms know where to look and what to look for to fill the property quickly, but you might not have as much luck on your own.
Whether you decide to hire a property management service or attempt to handle your rentals yourself, the most important thing to remember is your obligations as a landlord. Only informed decisions can keep you on the right side of the law while limiting the damages and other expenses you are responsible for. A well-managed rental property is an excellent source of income, so make sure you don’t squander it!