Whether you need to brush up on landlord-tenant law or hire a property manager, we can walk you through the entire process. iPropertyManagement will assist you in becoming a better, smarter, more efficient landlord with our comprehensive guides and useful resources.
This is the first question you’ll probably be asking yourself. Hiring a property manager can make or break your investment. You don’t want to hire one if you don’t need one, or else you could risk losing thousands of dollars for no reason. On the other hand, the same thing could happen if you don’t hire one and you’re struggling to manage your unit(s). Here’s what you should consider:
If you live far away from your property, it will be much more difficult to keep your property under control. Traveling to and from your unit will require a lot of your time, effort, and money. Managing a property when it’s just around the corner is one thing, but packing a bag every time you get a maintenance call is another.
Number of Properties
In addition, you should think about the number of rental units you own. Many landlords can manage one or two units on their own, but there is only so much one person can do. Once your investment starts to grow, it will be overwhelming and exhausting.
You’ll be pressed for time if you have other commitments. When your rental unit isn’t your top priority, it’s easy to neglect some crucial details. If this is the case, it’s best to have someone who can devote time to it for you. That way you won’t have to worry about it.
Being new to the rental business will offer you more challenges as you navigate situations and learn from mistakes. These mistakes, though understandable, are also quite costly — not to mention potentially dangerous. Not having a good grasp of landlord-tenant law will make you run into legal trouble. If you aren’t sure what you’re doing in terms of day-to-day maintenance, communication, organization, and so on, then countless issues are prone to arise.
Hiring a property management company is quite the investment. As mentioned before, if you hire one when you don’t need to, then more money will be wasted rather than earned. Scroll down to read more on property management fees.
A big part of being a landlord is communicating with others. From tenants to contractors, a landlord deals with people 24/7. This also means having to listen to tenants’ requests and complaints, as well as working to resolve any problems that manifest. If you aren’t much of a people person, then this will definitely prove to be very taxing.
Liability & Control
When you a hire a property manager, you’re giving up a large portion of the control you have. As a result, they will be able to make decisions for you, as well as mistakes. If you aren’t comfortable putting so much trust in somebody, then perhaps it is not the best idea. Yet, property management companies can administer a wide variety of services. So, if you find yourself needing help in different areas of expertise, the only other option would be to hire your own employees. You can refer to this guide if you decide to manage your property on your own.
If you’ve decided that a property manager is right for you, you may be wondering how exactly you would benefit from one. Here’s what a property manager would take care of:
A property manager will prepare your property for rental and attract more prospective tenants. By creating ads, networking, and researching similar units, they will develop the perfect strategy to fill vacancies quickly. In addition to that, they will provide 24/7 communication, so you can always be updated and prospective tenants can always make inquiries.
Setting the right rent for your property and handling the payments from tenants are operative in a property manager’s work. They will always ensure that payments are being made on time and in full. They’ll also implement the optimal rent collecting system that is both organized and efficient.
Prospective tenants will be diligently screened and interviewed by the property manager. They will also be provided with the proper, legal paperwork upon move-in and the property will be inspected prior. Property managers also handle all complaints and tend to them in a prompt, productive fashion.
Property managers have access to credible, affordable, and reliable handymen and contractors. They will be able to handle any issues with the property, as well as respond to them as quickly as possible. This will save you the time, trouble, and expense of finding a good repairman on your own.
Property managers are experts on landlord-tenant law. They are aware of all the rules and regulations surrounding rental properties, meaning every variable should always be legally compliant. This is increasingly important, as not having adequate knowledge of the legalities is usually a recipe for disaster. Property managers will also handle the paperwork that goes along with the eviction process if the situation were ever to arise.
A notice of entry will always be given to tenants and agreements will be made in the lease regarding such. You can be sure your tenants’ privacy won’t be invaded while still being regularly updated on the status of your property.
Property management fees can vary from manager to manager. They usually come in the form of a basic percentage of the rent, a specified, flat fee, or a combination rate.
Be wary of the wording in your contract with a property manager. “Percentage of Rent Due” indicates the property manager would get a percentage of the rent even when it is vacant. “Percentage of Rent Collected” specifies that the fee would be based only on the money you are making from tenants. In any case, keep a lookout for companies who charge much less than the norm. This could suggest that the company provides a lesser quality of service, or that it will be charging you for everything along the way (which adds up very quickly).
A vacancy fee can be one month’s commission up front or any other amount that is distinguished in your contract. This money will be for advertising, showing the unit, or any other expenses that come up when trying to fill the property’s vacancy.
Some companies charge you for setting up an account with them. It is important to be wary of these companies, as they usually charge much less for their services.
These kinds of fees are usually negotiable. It is best to set the leasing fee to a certain amount so that the company always has the same amount no matter what. There is not much of an incentive for property managers to sustain tenants if they get paid every time they find a new one.
You should try and combine the advertising fee with the leasing fee. However, that’s not always possible. Make sure you know exactly how much the company is spending on advertising your unit.
Sometimes a property manager will charge you for the paperwork of renewing a lease. Try to negotiate to eliminate this fee as the work for it is very minimal.
Some companies may charge you a fee for this because they have a repair crew on call. It can take a lot of time and money to find someone to complete a job sufficiently on short notice.
Many states require that you go to court when a tenant is evicted. It is your responsibility to take care of all the expenses. A property management company might also charge you for filing the paperwork that comes along with the process.
Reserve Fund Fee
This is money your property manager can hold onto in the case of an unforeseen emergency.
Late Payment Fee
The property management company may charge you for not paying for services on time.
Paying Your Bills Fee
Companies that charge this fee will take care of paying your mortgage, insurance, association fees and more. This may appear under a different name in your contract, but it is very useful and convenient.
Early Cancellation Fee
If you hire a property management company and then realize its services are not right for you, it may charge you for ending the contract sooner than it was stated. This is why it’s so important that you really research property managers beforehand.
With so many property managers to choose from, it’s pretty overwhelming to narrow down the list to just one. Noting the differences between respective property management companies will help you determine what you need and what you’re looking for.
Not all property managers offer the same kinds of services. Some may provide more help than others. Some may not even provide services for your property type. It’s a good idea to obtain references for the property manager in question and ask them extensive questions. Reading about them on their website, if they have one, would be useful too.
As discussed in the previous section, property managers charge different rates for different things. Property management companies that are suspiciously affordable usually have other tactics for emptying your wallet. Be wary of sneaky wording and unnecessary fees — you can easily get caught in an expensive trap.
Different property managers will approach certain situations differently. They may also use different kinds of software and organizational systems. Their priorities may be in different order and their areas of expertise may vary. Do your research beforehand.
The contract you will sign with a property manager is extremely important. Every property manager will have their own unique contract underlining specific parameters and setting certain expectations. Discuss this with the property manager and thoroughly read all of the fine print.
Finding a property manager is the easy part. No matter where you are, just a few clicks will take you where you need to go. iPropertyManagement.com has all the resources you need to obtain a list of over a thousand different companies. First, click “Locations” and type in your city. Then, wait for the list to load, and you’re free to scroll through all the options and read up on what they offer. The charts include everything from contact information to a number of employees to pricing. Pick a few property managers who seem suitable for you and proceed to find out more about them.
As previously suggested, many customers usually take to the Internet to voice their opinions. As a result, invaluable information and juicy details are right at your disposal. People all over Facebook and Twitter are either raving or ranting about services they’ve used. You can easily discover the true colors of a property management site by looking online.
Talk to other landlords, real estate agents, and investors and ask them about their experiences. You can be sure to receive a candid response from these individuals since posts on a website can’t be monitored. Consider asking them questions like:
- What company has worked best for you?
- What company did not work out for you?
- What were you happy/unhappy with?
Sitting down and having a conversation with a contender would be infinitely helpful. Take notes on what you speak about and what the individual’s replies are. Later, you’ll be able to compare notes from different conversations and figure out who excels. Make sure to have a set of questions to ask them beforehand. You should ask them specific questions about their skills and services and managing style. It’s also important that they appear to be engaged and interested in your rental business. If they are dismissive or act like they do not have much time for you, then keep looking.
Furthermore, you can ask the property manager to show you the products of their work in the past. It’s important to note the quality of advertisements they put out. You want to see exactly what they are capable of. Reaching out to some of the tenants renting properties managed by the company is a good idea too.