You might be thinking you'll save a few bucks and manage the property yourself. Trust me: this is a terrible idea. With this in mind, here are a few key reasons to hire a property manager:
- They manage the tenants: This might seem like a no-brainer but this is incredibly important. While you're building your net-worth with real estate you don't want to be baby sitting tenants. Some tenants need a lot of hand holding and your property manager will help them set up their utilities, paying rent on time, and generally handling all of the questions tenants ask. Trust me this is not the business you want to be in.
- Getting the right rental prices: Our buyers at Morris Invest often ask how we determine the rental rates of our properties. The answer is we don't, the property managers set the rates. They will have an intimate knowledge of the market and what each neighborhood can demand. The property managers we work with always reassess the rental rates each year to determine how much we can increase our rents.
- Finding the Right Tenants: This is the most important job the property manager performs. A quality manager will perform full background checks on the tenants which includes employment verification, criminal background checks, previous rental history. A good manager will also get on the phone with previous landlords to confirm that the tenants pay on time and can be counted on. The hard work on the front end is why we have great tenants in all of our properties.
- Marketing and maintaining your properties: If you live 1,000 miles away from your rental properties are you going to fly in and put out signs saying "for rent"? Of course not. A great property management company will make sure that your property is always filled with a tenant. Remember they don't get paid unless you do. They also handle local city governments who'd want to slap a fine on you because a few branches fell during a storm. The property manager can stand between you and hefty fines by maintaining the integrity and appearance of the property. I love getting an email from our management company to let us know that they've taken care of a trash violation before we ever knew about it.
- Collecting Rent: Let's be honest it's all about the cash flow. Your property manager cultivates a relationship with the tenants and sets them to a rental payment schedule. For instance our manager knows that one of our tenants receives her pension check on the 7th of every month that means she's not able to pay rent on the 1st of the month. THe manager set her rent collection for later in the month. It literally pays to have a quality manager handling things with a personal touch. Your tenants will thank you!