1. Increase Property Income
This is easily the MOST IMPORTANT reason to use a property management company. Increasing rent is the number one reason why property owners should seek a reputable management company.
One of the biggest mistakes we see property owners make is NOT raising rents or enforcing late fees. This is where property management companies stand apart.
Whether trading on the stock market, private business, or real estate; every investment is expected to turn a profit. Income property investors need to align their goals with a management company that has their interests in mind.
A management company should do more than maintain a property and do the bare minimum; they should treat it like the investment it is.
*Protip: The number one way to increase an income properties profit is raising rent with the market.
In recent years here in Utah we've had it better than most and have seen an annual 7% increase in market rents throughout our state. We follow a simple win-win process with all of our properties, if market rents increase 7% then we raise rent 3% across the board.
This allows us to keep a happy tenant with lower than market rent, and brings in more income for our owners year after year.
2. Property Maintenance
Maintenance is something that every property will encounter at some point and we don't just mean regularly changing the furnace filters or performing inspections. We are talking talking about broken windows, doors, changing carpet, plumbing repairs, repairing walls, paint the list goes on.
Over time a home will get worn out and need repairs, that not only costs money but an incredible amount of time.
Time isn’t thought about much at first when it comes to owning income properties. So when calculating each hour spent running back and forth doing repairs, trips to the hardware store, setting up quotes, all while working around an already packed personal schedule; the days get eaten away fast.
Let's not forget about the tenants, how unhappy will they be waiting several days to get a water heater repaired to have running hot water?
With a decent management company, owners will save huge amounts of money in repairs but most importantly saving them their time. We have fair prices and are incredibly quick with maintenance. More than that we work with our owners on bigger repairs to get the most out of the money spent. An investment needs to bring money in. So spending money where it's not needed can be avoided with the right knowledge.
3. Rent Collection & Distribution
Property managers should be pros at collecting rent, fines, late fees, deposits and distributing funds to owners. Every property owner should ask prospective management companies about their collection process. Managers should have a smooth and painless process for distributing and collecting rent each month.
In our years of experience we now believe it as a fact that the majority of property owners do not collect late fees or increase rents to keep up with the market. A mistake we see with owners is NOT enforcing late fees from tenants.
*Protip: Collecting a simple $50 late fee, more times than not, will cover a large portion of management costs.
Working with our tenants is our key to success and the ace up our sleeve when we are presented with a situation where rent is late.
Managers should always be on the side of the owner, and keep their intentions in mind. That's defined as enforcing the terms of the lease agreement and collecting late fees when rent it late, period.
Treating our owners assets like they are our own; is what we're all about. We are here to help grow our clients real estate portfolios and see their investments increase in value.
4. Tenant Turnover
Tenant turnover is inevitable, every property will cycle through tenants but the frequency of turnover is completely within control. Every single time a tenant moves out we (the property manager) has to list the property to be leased. Not only that but run background checks, make/receive phone calls, file paperwork, update listings, collect deposits, walk thru's, maintenance and everything else that goes into placing a tenant into a residence.
It’s proven that a happy tenant will stay in a residence year after year which will drastically cut down on the frequency of residential turnover. See what these guys over at Happy Tenant have to say about it, they have literally taken the idea and ran with it.
*Protip: a happy tenant has the same side effects as a happy wife.
So people ask themselves “what can I do to prevent all that work?” Good question, the answer is to make sure; when the property is filled initially, there is a quality screened tenant and good management policies are being practiced.
Hiring a management company won't just streamline the leasing process but it puts a bigger sense of urgency on the matter. It can cost hundreds of dollars to place tenants into a residence.
The biggest expense is to the owner, every month that property is vacant, they have to pay the mortgage out of pocket. We only make money when our owners are making money so having a pool of pre-qualified tenants and having a healthy network of individuals searching for a home is critical.
Invest. Manage. Grow.
Owners should take the four reasons to use a property management company to the bank, literally.
We believe growing investors assets is the key to property management. Owners need to be educated in the difference between managing a property on their own verse using a property management company.
Hiring the right property management company is the best decision any property owner could make.