Employing the services of a property management company is one the many decisions that you will need to make when investing in real estate. Once you build a large portfolio of properties and wish to have a life away from your real estate investing businesses you will need the services of a property manager as a buffer between your tenants and your family.
Property Management Company Benefits
The benefits of a good property management company are quite numerous:
They eliminate the need for tenants to have your phone number. A few late night phone calls can drive out many investors from the business of renting properties. If you’ve managed rental properties without the buffer of a property manager you will know that it doesn’t matter what time of night or the morning things go wrong and you are the first person your tenants call to fix those things. A property management service is able to handle problems for you while letting you sleep through the night.
Repairs to Property
Property management services also have a qualified and reliable trades people that can handle many of the things that go wrong with investment properties. The some cases (specially commercial properties) management fee may be included as outgoing charges payable by the tenant. Your property management company or property manager is often the best source to find contractors to handle the repairs they cannot make for you as well as the repairs that they can. If you have worked with trades people you will know how difficult it can be to get hold of someone in an emergency. It’s nice to know that someone else can deal with some of the negative things about owning rental properties.
Handling Legal Issues
My personal favorite reason to seek the services of a property management service is that they are qualified to handle the legalities of taking care of tenants who cannot make the rent for months on end. This is after all a business and while you can relate to the circumstances that leave some people unable to pay their rent you need the income from their property in order to pay your bills and mortgages. It’s much easier to leave some of the less pleasant tasks to a qualified manager, especially if you are a softy for sob stories.
Re-letting the Property
Property managers also handle the advertising for your property and the cleaning up and retouches that are necessary between tenants. They also allow you to take vacations and such filled with the knowledge that your properties and tenants are in good hands even when you aren’t there to oversee everything. Everyone needs to take a break sometimes it’s nice to know that with a reliable property manager you can actually sit back and relax while taking those breaks without worrying about all the particulars of the properties you own so far away.
One of the pleasing things that I have found with employing a property management company is that my vacancy rates have come down. Property management companies shift around their tenants if they are up sizing or down sizing. Their first preference is to find tenants for properties that are under their management. Casual letting services comes second in their list of priorities.
The economics of employing services of a property management company works in your favor. The property management fees can be claimed back for tax purposes as expenses. In most cases you qualify for a landlord insurance only if the property is under professional property management. Getting landlord insurance has saved me thousands of dollars in lost rents when a tenant breaks a fixed lease term or damages a property. Even if the property manager reduces the vacancy factor on an average by two weeks in a year you will find that the property management pays for itself. You pay very little or no money out of your pocket.
If you are going to invest in real estate and have fun doing it then employing services of a property management company is a must. It will save you time, effort and money. You will have the freedom to look, analyze and buy more real estate. The more properties you have, the more sense it makes to utilize the services of a reliable property management team.