Once you have invested in a rental property, the
responsibility of maintaining and running the property can
quickly become overwhelming. For many Owners, the logical
solution is to hire a Residential Property Management
company to oversee their rental property. But is this the
right decision for you? Here are the top 10 reasons to
consider why you should hire a residential property
management company and how the benefits far outweigh the
costs.
1) Rent Collection: A professional residential property
management company ("PM's") have systems and strategies to
improve rent collection and on-time rent payments. This
allows you to ensure swift and consistent rent collection.
Quick and consistent rent collection is absolutely critical
in this real estate market where good cash flow can mean
the difference between success and failure as a real estate
investor.
2) Local Knowledge of Rental Rates: PM's have extensive
local knowledge of rents and the ability to determine the
highest rental rate possible for your property. With the
internet and the ability to do large scale searches for
rental properties, potential tenants know if your property
is overpriced, even by $25. Overpriced properties sit
empty while other properties get rented. Knowledge of
rental rates is a key factor to fast rentals and quick cash
flow.
3) Tenant Screening: A PM requires a detailed written
application from each adult with photo identification.
Additionally, PM's will run criminal, social security and
public notice (bankruptcy or judgments) searches to
determine if the application is accurate. PM's will also
call past and present employers, landlords and other
references. PM's have set requirements and standards for
accepting or declining an applicant and thereby ensuring
you comply with fair housing rules and other local and
state regulations.
4) Marketing Expertise: PM's have years of experience in
how to best market your properties so they are rented in
the quickest time possible. PM's use both offline and
online marketing to maximize your properties' exposure and
find qualified tenants quicker. Most PM's utilizes 10, 20
or even 30 different techniques to rent a property quickly
which reduces your carrying cost of a vacant property.
5) Property Law and Regulations: PM's have extensive and
up-to-date knowledge of property laws and regulations and
will assist you in making sure you are in compliance with
your local, state and federal rules and regulations. These
rules and regulations include complying with fair housing
regulations, the Americans with Disabilities Act and other
applicable local, state and federal laws. Avoiding one law
suit will more than pay for any PM's fees many times over.
6) Tested and Reliable Professionals: residential property
management company's will already have vetted numerous
vendors, suppliers and contractors to make sure they
provided good quality work at reasonable prices. Failure
to properly vet these professionals can be a costly
mistake. Many Owners overlook this function because they
do not know how to do it or because it is a time consuming
and laborious process.
7) Inspection Reports: PM's perform property inspections
before, during and after a tenancy. Additionally, most
PM's will perform routine property inspections at least
every 180 days. Your PM should be responsible for
preparing frequent written inspection reports for each of
your properties. Faults in your property that are found
quickly can be resolved before they become expensive items
of disrepair.
8) Financial Records and Security Deposit Escrows: PM's
will provide detailed income and expenses reports as well
as cash statements every month saving you the bookkeeping
headache. Additionally, PM's will also manage your
security deposit escrow funds and make sure you are in
compliance with local and state regulations. PM's will
provide end-of-year tax reports for your accountant or
financial advisor.
9) Emergency Calls and Shield You From Tenants: A
residential property management company will shield you
from emergency maintenance calls and tenant headaches.
Imagine never having to deal with late night "my toilet is
overflowing" call.
10) Low Costs: A PM should only be charging around 6% to
10% of the monthly rent collected. Assuming a monthly
rental rate of $1200 per month that is a fee of $72 to $120
per month. This is less than $4 per day! Can you possible
do all these things for less than $4 per day?
11) Bonus Reason! FREE TIME: A good residential property
management company will free up your time for doing deals
that make money. I mean serious money as opposed to
dealing with non-money producing activities like tenant and
property management.
----------------------------------------------------
Mike Lautensack is the owner of MVL Property Management,
LLC ( http://www.montcopropertymanagers.com/ ) based in and
around Philadelphia, PA. He advises real estate investors
how to build wealth and financial security through
hassle-free ownership of investment real estate with their
"Total Property Management Program." This proven
management system allows owners to enjoy the financial
benefits of cash flow, tax savings, and wealth creation
while it GUARANTEES you will never receive a late night
emergency call, deal with a lengthy eviction proceeding or
ever have to interact with an irate tenant.
