Anyone who invests a great deal in residential homes will probably consider hiring a rental management company at some point. Working with well-respected property managers can relieve you of many headaches, especially if you live far away from your properties. On the flipside, working with a disreputable company can only create more headaches than you bargained for. In this article, we’ll go over a few of the things you need to take into consideration when selecting which rental management company.
Responsibilities Of Property Management Company
A property management company’s top priority should always be to work on your behalf with all of your tenants. This means employees should ensure everyone pays their rent on time, address any maintenance work that’s needed, screen incoming tenants, and, if necessary, carry out evictions.
One major benefit of working with a property management company is that you don’t have to worry about all the issues that go along with being an employer. Ideally, you just let the company handle all the issues for you. In
How Much Does This Cost?
While partnering with a good property management company has obvious pros, it’s not great for every property owner. Bear in mind that property management companies tend to be quite expensive.
Many experts in this industry say you should expect to pay anywhere between 4 and 12 percent of your monthly rental rate to the property management company team. It’s a good rule of thumb is 10%. This is a common average rate for a property management company.
Who’s A Good Fit For A Property Management Company?
First, you have to figure out how much money you’d lose (or save!) by selecting a rental management company to help you out. Once you’ve ensured this loss falls within your budget, then you think over a few other factors to determine whether you really need a property management company’s services.
For starters, property management companies are best for landlords who own more rental properties than they can possibly manage on their own. This is especially the case if landlords live far away from most of their properties.
Property management companies are also a good fit for landlords who have a full-time job outside of owning property. If you already have another steady stream of income and property investing is something “on the side” for you, then a property management team could relieve a great deal of pressure.
Property managers often have great connections with plumbers, HVAC repair companies, roofing contractors, and other handyman services. They screen potential tenants. In short, they save you a lot of time.
Property managers also usually save landlords money. While they charge you, having a great tenant in place who stays there four years is much better than having a tenant stay one year. When that happens, landlords are stuck with a 1, 2 or 3-month long vacancy while they wait for new tenants to find the rental.
Time is money.
A Note On Premises Liability Injuries
Please bear in mind if you’re investing in Louisville that you could still be held responsible for premises liability injuries on your property. If a landlord knowingly neglects to take care of known hazards inside or around his/her property, then this could be grounds for a premises liability injury claim.
Just a few examples of responsibilities landlords need to uphold include: ensuring staircases are in good working order, decks aren’t going to collapse, and putting up fencing and safety signs around pools.
Any landlord who needs extra help maintaining a hazard-proof property might consider passing this responsibility off to a property management company. Many property management companies can also go to court on your behalf in the event of an eviction. Please go over the details of how the property management company you’re interested in deals with evictions before partnering with them.
If you’re still worried about premises liability, speak to an insurer. They may advise you to require tenants to obtain renter’s insurance or recommend that you obtain a general liability policy.
How To Choose A Property Management Company: Three Tips
You should have a good idea whether working with a property management company is right for you. Now, let’s go over a few things you need to screen for before working with a property management team.
- First, figure out how this company screens its tenants. You want to be sure your property management company has a thorough screening policy so you don’t end up with a bunch of tenants who can’t pay on time.
In addition to checking each potential tenant’s credit, property management companies should do a criminal background check, look for previous evictions, find out each tenant’s employment status, and contact former landlords.
- Another thing to consider when working with a property management company is how long it takes to turn over a property. Be sure you know whether tenant turn-over labor costs are charged as a separate fee by your company. Some companies only charge for materials, but others charge labor fees as well.
- Third, be sure to figure out the strategies your property management team uses to advertise vacant properties. You should also figure out the average rate of vacancies in your city. Ask property management team if they currently have any vacancies.
Final Thoughts On Property Management Companies
As you could see, property management companies that are well-run can be an incredible asset to your residential investments. You just have to be sure working with one of these companies is worth the cost.
Take your time screening any property management companies you’re considering. Work both online and in-person. This careful screening process can make a huge difference in the quality of your property investments over the long-term.