A competent property manager can add significant value to your investment, which is why many seasoned real estate investors will tell you that a good management company is worth their weight in gold. Here are a few ways that a good property manager earns their keep:
Higher Quality Tenants
Think of tenant screening as the moat and draw bridge around your castle. It is certainly possible to get a bad tenant out of your home once they are in, but it’s a real hassle and you are so much better off never accepting them in the first place. A thorough screening process results in reliable tenants that:
An experienced property management company has seen thousands of applications and knows how to quickly dig for the real facts about candidates and analyze that information for warning signs. By allowing a management company to handle the screening, you will also be shielding yourself from rental scams directed at owners, and discrimination lawsuits resulting from an inconsistent screening process. This kind of experience takes time, and insomuch as it means avoiding bad tenants, scams and lawsuits it is arguably one of the most significant benefits a property management company will provide.
Shorter vacancy cycles
A property manager will help you perform three critical tasks that affect how long it takes to fill your vacancies:
Better tenant retention
While its easy to see the effects of lost rent, there are other equally serious problems with a high tenant turnover rate. The turnover process involves a thorough cleaning, changing the locks, painting the walls and possibly new carpet or small repairs, not to mention all the effort associated with marketing, showing, screening and settling in a new tenant. This is a time-consuming and expensive process that can often be averted by keeping tenants happy and well cared for.
A good property management company will have a time-tested tenant retention policy that ensures happy tenants with lengthy stays in your properties. These kinds of programs require a consistent, systematic approach, which is where a good property management company will shine.
Tighter rent collection process
The way you handle rent collection and late payments can be the difference between success and failure as a landlord. Collecting rent on time every month is the only way to maintain consistent cash-flow, and your tenants need to understand this is not negotiable. By hiring a property manager, you put a buffer between yourself and the tenant, and allow them to be the bad guy who has to listen to excuses, chase down rent, and when necessary, evict the person living in your property.
If you let them, your tenants will walk all over you. They have to be trained to follow every part of the lease or deal with the consequences. Property managers have an advantage because tenants realize that they, unlike the owner, are only doing their job and are obligated to enforce the lease terms. Many property managers will tell you that it is considerably easier to manage other people’s units rather than their own for this reason.
Lower maintenance and repair costs
Good maintenance and repairs keep tenants happy and preserve the value of your investment, which make them a very important part of land-lording. By hiring a management firm you gain access to both their in-house maintenance staff, as well as their network of licensed, bonded and insured contractors who have already been vetted for good pricing and quality work. This can translate into significant savings compared to going through the yellow pages and hiring a handyman yourself. Not only is the firm able to get volume discounts on the work, they also know the contractors and understand maintenance issues such that they are capable of intelligently supervising the work.
Personal benefits for owners
A final thought
Of course, this is an ideal scenario. These results can only be expected if a management company is competent, trustworthy and a good fit for your property. A poor choice of a management company can produce many headaches of its own. Contact us at LeasingAZ.com and feel confident in letting us work for you!