Property management is an intimidating prospect for many income property owners. The ongoing maintenance, tenant relationships, rent collection, and lease enforcement issues require both time and management skills. A review of the five most common aspects of property management will help you decide whether you need to hire a property manager or whether you can self-manage your building.
The cost of property management is often the primary concern for new investors. For a fee, property management companies assist with all aspects of a rental property, relieving you from the burdens and time demands of maintenance, rent collection, and tenant relations. The fee is typically a percentage of the monthly rent payments.
Self-management comes with a cost too. Your time has value. Determine whether you have both the time and skill set to fully dedicate yourself to managing your tenants and your building daily.
Self-managers learn on the job, getting a crash course on tenant relations, rent collection, and building maintenance. It can be both challenging and costly to learn on the fly without basic property management knowledge.
On the other hand, experienced property managers have the breadth of experience to deal with most income property issues. For those issues that require additional expertise, property management companies have established relationships with qualified outside professionals.
Income properties have a variety of maintenance needs, including seasonal, routine, and emergency repairs. There is a time commitment that will be necessary if you want to self-manage your property. Do you have the time, energy, and know-how to deal with all the maintenance your property will require?
A property manager can efficiently address many of the maintenance needs of your building. Additionally, property managers can help set maintenance budgets, deal with contractors, and assist with tenant relations during maintenance. It is important for property owners to set clear expectations concerning the maintenance needs of their building when consulting with a property manager.
Tenants are the cornerstone of your business. It is in your interest to ensure the smooth operation of your building. This starts with tenant screening and extends throughout the lease period.
Management of your property will include resolving tenant disputes, responding in a timely fashion to maintenance requests, successfully collecting rent, and dealing with delinquent tenants.
Taking responsibility for those duties can save you money but at the expense of your time. The scale of the property dictates the demands it will place on the manager. If you do not have the necessary time to dedicate to the property, you may need to hire a manager to help.
The terms of the lease agreement should clearly outline both landlord and tenant responsibilities. It itemizes terms such as the rental amount, payment dates, lease term, and any rules surrounding the tenancy. The landlord is responsible for ensuring that all parties are following the rules set out in the signed lease agreement. If a tenant is in violation of the rules, you may need to seek legal recourse.