Property Management Companies can help a property owner or investor manage every aspect of the property. What you should expect from them is limited only by you. Remember This is your property. A Property Manager Company can only do what you allow them to do.
As a handyman, I have worked with several property management companies. In my experience, they are good companies with good people who truly care. What you are about to read will help you decide if hiring a Property Management company is right for you or not.
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Property Management Companies What They Do
Property Management Companies can help any property owner or investor with every aspect of managing that property by:
- Advertising For Renters
- Pre-Qualifying Renters
- Evicting
- Dealing With Default Rent
- Taking Deposits
- Collecting Rent
- Taking Care Of Maintenance
- Record Keeping
Using a Property Management Company will virtually eliminate any hands-on management of the property and leave you the property owner anonymous to the renters and free to do whatever else you want to do.
What Do Property Management Companies Charge?
This is a great question because in my experience with property management companies I feel like they don’t charge enough.
In my area of the country most property management companies charge between 10 – 20 percent of the gross rental.
The percentage you pay will be the deciding factor of what level of management you can expect from the property management company.
For instance at the 10% level you will get the basic management services:
- Full Leasing Support (1-month fee)
- Single Point of Contact
- Online Rent Collection
- Marketing Photos and Videos
- Monthly Financial Reporting
- Owner Portal Access
- Direct Deposit for Owner Payments
- Move-in & Move-out Services
- Repair Coordination
- Takeover Inspection
- 24/7 Emergency Response
If you go the higher percentage rate you might get all the basic management services plus other services you may not want to deal with yourself. These services may or may not include (Depending On The Property Management Company):
- Rental Loss Protection
- Damage Protection
- Evection Fees
- Bill Pay Services
Escrow Account
Most property Management Companies will want you to put a minimum amount of money in an escrow account for maintenance. This is so they don’t have to keep asking for money to fix simple problems with a rental.
The escrow account will replenish when the rent is paid, so if the property Management company spent $150 in the month for maintenance this will come off your rental settlement to replenish the escrow account.
Maintenance Vendors For The Property Management Companies
Maintenance vendors are the people that the property management companies hire to do the actual maintenance work. These vendors include:
- Handymen
- Electrician
- Plumber
- Landscaper
- Carpenter
- Contractors
All these trades are who the property management companies use to do the maintenance work. The level of quality you will get from any vendor is the amount of money you (the property owner) are willing to spend for any project on your property.
You Get What You Pay For
Most vendors will charge $50 to $150 dollars an hour plus materials and sometimes travel time to do any maintenance work. If you tie the property management company to a small dollar figure for doing maintenance, that is the level of work you will get. This will also determine the quality of tenant you get.
I have been a handyman professionally for over two years and have worked with many property management companies. The difference to weather one property management company is better than another depends on the property owners they service.
If you are a slum lord and only want to do the bare minimum, the property management company will only allow this if they are a new or small company. They need to eat so they will cut corners to get the work done to please the property owner.
The bigger property management companies will not allow this and will not work with slum lords. They will only work with professional property owners or property investment companies that want to keep up the property.
5 Reasons To Hire A Property Management Company
- Investor with more than two properties
- You Live to Far From The Property to Manage it Yourself
- You Don’t Like Managing Tenants
- Don’t know How To Market
- Know Nothing Of Tenant Laws
9 Reasons Not To Hire a Property Management Company
- You Only Have One Or Two Properties
- You Are Handy and Can do the Work Yourself
- You live close to your properties
- Love your tenants
- Know Something about Real estate Tenant Law
- Love Marketing your Properties For New Tenants
- You Have The Time
- You are Organized
- Hate Giving Up Control
Summary
All the property management companies I have worked with are stand up companies that really care about what they do. They are only limited by the property owners they serve.
Hiring a property management company isn’t for everyone as I have explained. If you are a property owner you must weigh the pros and cons of hiring a property management company.
If for any of the reasons listed above you decide to hire a property management company make sure you can financially do so and still be able to financially maintain the property.
I don’t know how many times I have seen tenants get upset because a property owner doesn’t have the funds to fix an annoying problem.
Owning a rental property comes with an obligation to keep up the property and keep it safe and comfortable for the tenants that pay the rent. This is your bread and butter and financial security. Treat it as such.
Resources
Feel Free to download any of the resource material below if they will help you
