How Can A Property Management Company Help Your Business?

How Can A Property Management Company Help Your Business?


Those new to the landlord game typically have one question eating away at them: whether or not to hire a property manager. A good property manager can make the rental property experience that much easier and free up time for other areas of your business. However, there is a fee for their services. Whether this is worth it or not depends on a number of factors. As with any business, there are ways to save money and times when you should spend money to get a larger return. As you are deciding what to do with your property, here are four things to consider:

1. Run the numbers: Before you even make an offer on a rental property, you should have an idea if a property manager works within your budget. The average property manager will charge either 10 percent of the monthly rent or a flat annual fee. For this fee, they should handle rent collection, lawn care and snow removal, maintenance expenses and management fees. They will act as a buffer between you and your tenants. You will still pay for these expenses, but they will coordinate and schedule everything. In a perfect world, the property manager fee will not make or break your bottom line. If it does, you may be looking at a bad rental property to begin with. Your decision will rely on a few other factors, but the first thing is to make sure the numbers work. If the numbers make sense, you should consider moving forward.

2. Time: Time is one of the most important assets you have in the real estate business. Theoretically, the more time you have available, the more time you will spend on finding new deals and growing your business. Conversely, if you have to spend hours every week calling contractors and dealing with tenant issues, it will negatively impact your business. Even if you have just one rental property, a property manager may still make sense. You can actually spend more time getting used to the process and figuring out what to do. If you have multiple properties, you need to have a system in place. The occasional phone call or maintenance item will not make or break you. It will be constantly traveling to the property and thinking about issues that come up. There will be weeks when you don’t think about your rental and then you will have multiple issues in a few day period. If your schedule is full and you can’t commit to working on the property like you should, a property manager may make the most sense. If you have free time and want to learn the ropes, you can try managing your own property on a trial basis.

3. Skill: If you are planning on managing your own properties, you need to be able to handle things that come your way. You don’t necessarily need to be a contractor, but you should have a basic set of handyman skills. Things like fixing a clogged toilet or changing the locks should be easy enough. It is the more difficult tasks that allow you to save money. Without a set of skills, you will end up wasting time, and even money, trying to do them on your own. What you could have had your property manager do for you in a fraction of the time, you end up attempting to do on your own. In most cases, this is not with the success that you may have had in mind.

4. Resources: The alternative to doing any work on your own is having people to call when you need them. This can be the most time consuming item for any new landlord. The first hurdle is where to find qualified people to do the work they need. Between Craigslist and Angieslist, you can find who you need. The second hurdle is in finding the right people for the work you need. Without proper references, you are essentially taking a leap of faith. Even if they can provide samples of past work, you never really know how accurate it is. There is a huge difference between getting the work done and getting it done right. Most property managers have several people they can call in a pinch when things pop up. Without a book of people to call, you will spin your wheels for precious days when your tenants are waiting for items to be fixed.

If you decide to move forward with a property manager, you need to make sure you are getting what you thought you would. By having to check their work and their numbers, you are really doing double the work necessary. This defeats the point of a property manager in the first place. You want them to handle virtually everything for you on the property and focus on increasing your portfolio. If you do opt to manage the property yourself, you need to know your limitations. Certainly do any work you can on your own, but know where to draw the line. Even small electronic projects can lead to major problems if not done correctly. Your goal should be to learn as much as you can about property management so you know if it is for you moving forward.

See more at: http://www.fortunebuilders.com/how-can-a-property-management-company-help-your-business/

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