What Are The Benefits of Using a Property Management Company?A knowledgeable property manager can add significant value to your asset, which is why many seasoned real estate investors will tell you that a good management company is worth their weight in gold. Here are several ways an excellent property manager earns their keep: Higher Quality Tenants 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: • Pay on time Fewer costly and time consuming legal troubles Expert landlords know it only takes one troublesome tenant to cause significant legal and financial headaches. A good property manager is equipped with the knowledge of the latest landlord-tenant laws and will make sure that you are not leaving yourself defenseless to a potential law suit. Each state and municipality have their own laws, these plus federal law cover a number of areas including but not limited to: • Tenant screening Avoiding a single law suit can more than pay for the property management fees, and save you time and distress. Better tenant retention While it’s simple to see the effects of lost rent, there are other equally grave 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 costly process that can often be averted by keeping tenants pleased and well cared for. Shorter vacancy cycles A property manager will help you do three critical tasks that involve how long it takes to fill your vacancies: • Improve and organize the property for rent - A property manager will advise and oversee cosmetic improvements that maximize revenue. 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. Assistance with taxes A property management company can help you understand which deductions you can claim, as well as organize the necessary forms and documentation to make those claims. Additionally, the property management fees themselves are also tax deductible. 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 • More liberty - Invest and live anywhere you want without the need to be near your properties. In addition, you can live and travel without the requirement of always being present in the event that your tenants have a need you have to tend to. Once you have found a good management company, it doesn’t matter if you live in the same state. Some landlords live in other countries and simply collect their check every month without ever seeing their rental units. A last consideration Of course, this is an ideal scenario. These results can only be expected if a management company is experienced, truthful and a good fit for your property. A poor choice of a property management company can create many dilemmas of its own. Tags: Untagged
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