Congratulations! You jumped into being an investment property owner. Great decision. Now time to make another great decision… hire a property manager. Yes, you’ll have to pay a fee to them to manage your property, or even properties, but in the long run doing so will save you a lot of money. Here’s how:
The first and best way to save you money
The first and best way a property manager can not only save you money, but help you make more money is to keep the time your property is vacant to a minimum.
Empty properties are money vampires. Not to mention the costs of cleaning, changing locks, fixing damage and wear and tear and marketing the property when it is unrented. You are spending money to maintain it, paying taxes on it and probably mortgage payments on it all while there is absolutely no income to offset those costs.
A good property manager or management company will have a pool of prospective, prescreened and prequalified renters that they can contact to rent your property. Since part of our job is to keep your property well maintained, your tenants will be happy and less likely to leave in the first place.
Finds you high quality tenants
Another way we keep it rented is by finding your higher quality tenants. Bad tenants are a nightmare not just for the aggravation, but also for the expenses of unpaid rent, costs to evict them and any damage to the property. They can suck money right out of your wallet. It’s almost worse than a vacant property.
A property manager will vet prospective tenants for you. They will thoroughly check them out, including a criminal background check, verification of employment and review of his or her rental history. They will know the right questions to ask their employer and previous landlords to get the answers needed to screen them in or out.
Have you ever heard of “professional tenants”? They are scammers who get into the property, never pay rent and make it incredibly hard to evict them because they file lawsuits claiming discrimination.
Property managers are used to looking for this and weeding them out. Not to mention that they do know the Fair Housing laws and will be sure not to violate them.
Property management and maintenance and repairs
Repairs and maintenance can be expensive. A property manager can seriously save you some money. If they have their own maintenance crew, that is a huge help. Often, their services are included in your monthly fees, saving you this expense altogether. If they don’t, or the job is bigger or more extensive than maintenance staff can handle, the property manager will have a network of licensed, bonded and insured contractors.
Since we deal in volume, we can usually secure reduced rates for the contractor’s services.
Now onto the actual money to be made
A property manager will have an established and successful rent collection process. Live by the rule that if you give a tenant an inch they will take a mile.
Remember that you need a consistent cash flow and while life happens, it shouldn’t happen to your bottom line. The best part is that the property manager is the one that has to hear the sob stories, not you! They are much better at being impervious to the drama and enforcing the lease.
Let’s not forget the lease itself
They will have a standard lease they successfully use with their managed properties. One less thing to worry about! The property manager will get it signed and handle renewals of the lease.
This is important because if the lease isn’t renewed, but the tenant holds over, they become a month to month tenant. That will cause its own raft of problems. They will make sure it is enforced, and also make sure the lease doesn’t violate any laws.
Lastly, we will handle any necessary inspections. In order to maintain your property someone needs to regularly inspect it. Any small issues will be caught and fixed before they become big, more expensive ones. These inspections are part of your monthly fee and will save a lot of money in repairs.
Save some money!
So save yourself a bucket of cash and hire a property manager. It will be the second best decision you will make as an investment property owner.