Should You Manage Your Property or Hire a Property Management Company?
Rental properties can be a great investment, if you already own or are interested in getting into the market you may be wondering how to get the most out of your investment while not having it become a part time job. Maybe you’re wondering why you would pay someone to do all the things you could do yourself: what does a property manager do? Professional property management can take away the headaches of finding and maintaining tenants while also ensuring that your investment gives you the best possible returns. Find out the right way for you to reap all the benefits of investment property.
First of all, congratulations on making the decision to buy and hold real estate as an investment. Holding long term real estate is a great wealth building strategy, however, it can come with some challenges. One of which is rental property management.
If you own an income property you may have considered whether you want to self-manage or hire a property manager. The best way to assess how to manage your property is to ask yourself the following questions:
- How many properties do you own?
- Do you have great, reliable tenants?
- How good are you at dealing with people?
- Do you have a flexible schedule?
- Do you have working relationships with trusted, reliable contractors?
- How often do you travel?
- How often are you willing to replace tenants?
- Do you know where to find and how to place good tenants?
- Do you have reliable sources of income for unexpected damages costs?
- Do you know how much you can rent your property for, unfurnished or furnished?
- How much time are you willing to invest on a regular basis on maintaining your property?
These are just a few things to ask yourself to gain a better understanding of how you see your involvement in your property. While some people find they prefer high involvement from every aspect, others have decided they would rather their property act as a piece of their overall investment portfolio and outsource its management.
What to Know When Self Managing Your Property
If you do decide to manage your own investment properties be sure to speak with a lawyer to familiarize yourself with landlord and tenancy laws, compliance in fair housing practices, gather legal leasing agreements and forms, and generate policies like late rental payments and fees, payment plans, etc. If you choose to do everything yourself, be sure to put all these required documents together and be prepared to distribute at a moment’s notice.
If you think you might spend a couple hours a month accepting rent payments or answering the odd phone call, this may not be the case. While the advent of technology allows for ease in transferring funds, not all tenants are comfortable with this method and you may find dealing with cash and receipts as well as coordinating pick up times eating up more time than you would like. You will also need to build a network of trusted and reliable contractors and vendors who are bonded, qualified, and prepared to work during emergency situations (like a pipe bursting or rodent invasion).
Benefits of Using a Property Management Company
Infrastructure that is already in place
Rental property management services have policies and staffing in place to handle receiving rent, leases, applications, notices of entry and all other documents, screening procedures, and knowledge of the landlord and tenancy laws in your area. Property management companies will also have an extensive list of trusted and reliable contractors and vendors that they have built a solid rapport with.
Save your valuable time
Property management companies are skilled professionals who not only know how to efficiently deal with little nuances but have an understanding of how things add up and become time-consuming. Finding a quality management company can save irreplaceable time. This service simplifies investment property ownership by allowing you the freedom to enjoy life, work, or buy more rental properties to add to your portfolio!
Opportunity to outsource
Managing a rental property is not without its headaches. Consider dealing with troublesome tenants, severe maintenance problems, placing good tenants, property listing and tenant showings, assessing rental value, damages, potential evictions, broken leases and more! Having a thick skin to handle these issues, as well as cool head under pressure is not only a skill, but a requirement to property management.
Think of your investment property like a business, and your tenants are your customers. Any well-run and *profitable* business knows how to disperse workloads across qualified professionals to ensure the best possible service.
Save money
It may sound a little crazy at first to suggest that hiring a professional company to manage your property will SAVE you money, but let’s break that down. Purchasing a rental property may seem like the last step in the financial investment process but don’t forget to consider the costs of lost returns in vacant properties (from lack of income and potential vacancy taxes) as well as the value of your own time and energy in managing a property yourself. For a small percentage of your rent (that you can factor into your listing price) you can have a professional ensure your property is quickly rented to a qualified and reliable tenant and deal with the day-to-day tasks that come with property management.
Experience the benefits of professional rental property management with Rent it Furnished!
Securing a Property Management Company
If you do decide to hire a property management company, the best place to ask for referrals are from other successful and savvy real estate investors. When a property manager has a proven track record with other investors, it is much more likely they will provide excellent service for you too. Regardless of referrals, it is important to vet property management companies before hiring them and ensuring they specialize in the type of property that you own.
Property Management Interview Questions
- What are your management fees and how are these collected?
- How long have you been property managers and how many properties do you manage?
- How many evictions do you have each month?
- How long do properties usually stay vacant before being leased?
- How do you screen, and do you accept people who have had evictions? (If they do, it should be only after five years and or with a larger deposit and co-signer).
- How do you handle maintenance requests?
- What do you do when a tenant does not pay rent?
- How do you intend to market my property?
The takeaway
Real estate investments as a buy and hold may be the best way to generating long term wealth but it is not without its own set of challenges. You can manage your asset yourself if you are prepared to take on the work, logistics, and coordination needed to be a successful property owner. If you decide that you’d rather enjoy the freedom of your investment with renting made simple, Rent it Furnished has a great team of highly qualified property managers – servicing Vancouver, Toronto, and Montreal – who would be happy to help you get the best returns out of your investment!
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