Real estate investing can be an excellent way to build wealth, but it’s not for everyone. Managing physical properties over a long-term horizon requires much work and expertise that many people lack.
Hiring a property management company is essential to successful real estate investing. Here are five reasons why: 1. It saves you money.
Saves You Time
Even investors with a single property will benefit from having a good property manager to deal with issues that may arise, such as tenant complaints or problems with contractors. A professional will know how to respond quickly and efficiently, saving you a lot of stress and money.
In addition, property managers are aware of current real estate and rental market trends, which is important to determining competitive rental rates and knowing when it’s time to raise rent. This is something that owners don’t always have the knowledge or the time to do on their own.
Most management companies, including Acorn + Oak Mile High Property Management Company Denvercharge a fee based on a percentage of collected rent. However, other forms of compensation exist, such as a flat fee per unit managed.
Saves You Money
Owning rental properties is a great way to generate income and build equity. But property management can quickly become costly when you lose money on marketing, miscalculate rental rates, or deal with tenant issues while away.
A good investment property manager will save you more than the cost of their fee, which is usually a percentage of rent collected. Considering how much money you’ll save on mistakes and lost time, that small percentage should be worth the price.
Plus, property management companies often know local laws better than you do – they can help you avoid fines and other legal problems related to landlords. That alone could easily save you thousands of dollars throughout your career.
Saves You Stress
Being a landlord can be stressful. Having property management companies take on some responsibilities can help reduce that stress and free up investors’ time to work on other aspects of their business or future endeavors.
For instance, a property manager can handle tenant requests and small repairs. They can also coordinate with contractors and specialists to ensure scheduled maintenance is done at a time that works for all parties.
Another important aspect of property management is staying on top of federal, state, and city regulations. Having a local expert on staff can save you from costly mistakes like overcharging tenants for security deposits or violating fair housing laws. This can protect your rental properties and your investment.
Saves You from Mistakes
Property management companies can help protect you from costly mistakes, such as leasing a property to a tenant who doesn’t pay rent on time or damages your investment. Property managers also have industry knowledge and experience that can save you from legal headaches like lawsuits.
A property manager acts as a neutral middleman between you and your tenants, removing the ability for a tenant to ask for special favors or stall payment. A good property manager also treats your investment as a business, ensuring you charge market rent and promptly handle maintenance issues.
Finally, property managers can often handle repairs more efficiently than you could, saving you money in the long run. They can work with trusted contractors and often negotiate discounts, giving you more bang for your buck.
Saves You from Failure
Even the most successful real estate investors are not immune to failure. With a solid investment property management team, an investor can avoid serious legal challenges from bad tenants and other problems that impact the profitability of their investments.
A good investment property manager will take the time to vet potential tenants and conduct thorough background checks on applicants. This will help prevent problems like evictions, lawsuits, and loss of income from leasing properties to bad tenants. In addition, the right management company will have established relationships with service vendors that can reduce wear and tear on the property, improve tenant satisfaction, and save on maintenance costs over time. This will also make your investment property a better asset for future buyers. The cost of hiring a property management company may seem high, but it is worth the peace of mind and financial benefits.
