– you’ve done it. You’ve purchased an investment property… or two… or three! You planned on handling the management yourself, but you are now starting to realize that you don’t like to get the late night phone calls, or your don’t enjoy mowing the lawns. You could contract people to handle these services for you, but at some point a property management company – especially one that negotiates quality service at a discounted price- becomes desirable. You may think that a property management company is a waste of money.
It is true that they don’t come cheap (on the surface), but factor in that they are tax deductible, they handle all the needs of your properties, they often have negotiated discounts with vendors, and they are professionals- then they start to become something to consider. The factors addressed below may help you decide if you need a property management company for your growing portfolio.
What Does a Property Management Company Do?
These companies deal directly with tenants and handle the day-to-day operations of your property. They handle the marketing, collecting rent, handling maintenance issues and repairs, tenant complaints, and the legal ramifications of removing poor tenants.
Feel free to contact my management company – DCP Management – for more information on what a management company does and how you can benefit from one; as well as fee structures.
On top of that, the right Management Company brings experience to your property allowing you to rest easy knowing that your property is in good hands.
When Does It Make sense to Hire a Property Management Company?
1) You don’t want to manage your property
This may seem like a no-brainer, but is something few investors actually think about. You are probably investing because you like the cash flow, want the tax benefits, or are planning for your retirement. You are most likely not getting into investment property because you want to spend your free time finding renters, dealing with maintenance issues, etc. etc. It makes sense then to ask yourself what your motivation is. If you do not want to manage your investment property then you can find yourself in a sour position 3-5 years down the road. Instead, forget the headaches and have someone else take care of these stressors for you.
2) You do not live near your rental property
If you don’t live near your rental property then you are opening yourself up to significant liabilities. As the saying goes, “When the cat’s away the mice will play.” The mice in this analogy are your tenants and any vendors you hire. When someone is not there to watch your property how will you ensure that the snow removal company that you hired is properly salting your walks? How do you know that your tenants are taking good care of your space? The answer- you don’t know unless you are available to check in. A property management company deals with contractors and tenants on a daily basis. They have the ability to follow-up with companies to make sure that your work is being done correctly, and on time. A good property management company will be in contact with your renters making sure that they are adhering to your lease terms and making sure that your tenants stay satisfied.
3) You have multiple properties or units
If you have several properties then you will find yourself running errands daily. You will be trying to track down reliable contractors and trying to keep in contact with your tenants. The more properties you have and the more units you rent, the more you will benefit from a property management company. They will handle all of the issues that come with investment property and pass the benefits on to you.
