Recent economic conditions have turned many Americans into reluctant landlords. Finding great renters who are going to care for your property can be a tremendous challenge, and getting a bad renter out of your property can be expensive and time consuming. To save yourself a lot of labor and cash, hire a property management firm.
1) Pay your property manager from rents earned. This means your property manager earns a percentage commission from rents earned. Your manager may push you for discounted rents; these discounts make more of a difference to you than to the manager. However, it saves you the expense of covering the mortgage on dead space. Additionally, any apartment that stands open for an extended period of time is a magnet for vandals, and may be shunned by future renters. Your rental manager will be driven to get a tenant into your space, and this is to your benefit!
2) Work with a manager that charges a fee to apply. Does this limit your pool of applicants? Absolutely, and that is a good thing. It’s all well and good to have a phone number on the sign in front of the house, but if your manager also has on-line applications and that initial screening fee, you’ll have a pool of serious renters who are looking for a home. During this application process, your property manager will likely do a criminal background check, a credit check and will contact previous landlords, according to Revid Property Management. All of this data gathering will protect your property from abusive tenants.
3) Trust your manager. Rental management is a tough business; on occasion, you need to evict people for non-payment or property destruction. If you can’t see yourself kicking out a tenant who’s low on funds, you need a property manager who can handle the tough stuff. You’re running a business, not a shelter, and your manager can help!
Additionally, your manager can keep an eye out for future investment properties. If you have an interest in building up your stock of rental properties, your manager knows plenty of landlords and can help you locate additional investment properties for your portfolio.
4) Stay involved. Having a manager doesn’t mean that you can step back and watch the cash roll in. While you may or may not be able to do site visits, drive by your properties and contact your manager with any concerns you see. If something needs addressed, check with the manager for contractors that can help take care of the problem. Owning rental properties is never a hands-free investment, and if your manager knows you’re keeping an eye out for problems, they will be especially vigilant on your properties.
5) Expect a marketing fee. Many property managers collect a marketing fee from the first month’s rent. Your property manager has expenses to meet, including maintaining their web-site, office space, transportation and staff. They are out of pocket for all marketing of your property until the rents start rolling in, so this marketing fee is more than fair.
Owning rental properties is a great way to build equity, develop a steady income for your future, and create a portfolio of properties you can pass on to your family. However, it does mean being available for people at odd hours and handling complaints effectively. If you enjoy working on houses but dealing with people leaves you cold, you would be well served to hire a quality property management company. These professionals will give you a qualified set of eyes on your property and help you find great renters who will take care of your property because it is their home.