Staff at your office, significant others, fantasy football picks–your life is full of relationships. As a real estate investor, there’s one more relationship you should develop: one with a property manager. Whether you are purchasing your first investment property or adding a tenth house to your portfolio, you can benefit from working with a property manager. Let’s look at five ways a property manager can simplify your real estate investment life.
1. Tenant Selection
Property managers can help shield you from one of the most expensive mistakes in real estate: bad tenants. Whether they destroy your property or don’t pay rent, bad tenants can be extremely costly. Your property manager has the time and resources to screen tenants properly. Looking into employment, rental history, and even criminal background checks can help weed out the kinds of tenants most likely to cause problems.
Novice landlords often overlook warning signs or don’t know what questions to ask when speaking to references. An experienced property manager will have screened dozens or even hundreds of tenants. That experience will help them assist you with getting a high-quality tenant into your property.
2. Decreased Maintenance Costs
Your property manager can’t keep the toilet from overflowing, but they can help reduce your overall maintenance costs.
First, they often have relationships with contractors. Because they manage multiple properties, they can push more business to a worker or company. In turn, those contractors will likely offer better prices to keep the property manager’s extensive book of business. That means when the plumber comes out to repair that toilet, they charge you less. You benefit from your manager’s high volume of work with plumbers, drywallers, painters, flooring companies, tile stores, and more.
Second, an experienced property manager can suggest changes or upgrades to your property to decrease costs over time. For example, it may make sense to go with vinyl plank flooring when it’s time to replace your worn-out carpeting. It lasts longer, cleans better, and wears less. Property managers know what materials work best in rentals and help you demand top-dollar in your market. This kind of insight can save significant money over time.
3. Knowledge of Local Laws
Your property manager stays up-to-date on laws that affect your rental. If your jurisdiction limits annual rent increases or if they require specific clauses to be included in a lease, your property manager will be aware of that. Failure to follow the relevant laws can have significant monetary consequences for you, and it is surprisingly easy to run afoul of these rules. Do-it-yourself landlords need help staying up-to-date with changes in the law or understanding how nuances may apply to their situation. When you work with a property manager, they take care of that.
4. Time Savings
If the tenant gets locked out or has a question about trash collection, they will likely call or send a text, no matter what time of day or day of the week. It’s much more pleasant to have your property manager screen those communications than to take them all yourself. Often, the property manager can handle a question without even speaking to you. If they need to consult you, they will do so at a reasonable time, and they can handle emergencies even if you are unreachable.
Imagine it’s Friday night, and you are in the middle of a fantastic date or an incredible dream. Unbeknownst to you, the supply hose on your investment property’s upstairs toilet has just burst. In a situation like that, minutes can mean the difference between the ceiling caving in or not or the water reaching and destroying your wood floors. Minutes matter.
With your property manager available to take that call, they can address the situation quickly. They will walk the tenant through turning off the water and arrange for a flood mitigation company to be on site as soon as possible. That could save more on the damage prevented by a timely response than you pay your property manager in an entire year.
5. Decreased Vacancy Rates
You have to pay your mortgage and other expenses whether or not there is a tenant in your rental. During a vacancy, money goes out, and none comes in, so even short vacancies can damage your bottom line. Property managers have marketing budgets and contacts to help them quickly attract high-quality tenants. They also have the availability to show the property to prospective tenants, preventing delays in finding the perfect candidate.
Property managers often work with clients looking for rentals. That means they have a pool of interested renters reaching out to them. If you are self-managing, you don’t have that advantage. That can mean additional days or weeks your property sits empty between tenants.
A great property manager will also find outstanding tenants and cultivate strong relationships with them so your tenants are more likely to renew their leases. That ensures fewer vacancy days and more profit.
Selecting a tenant without using a property manager is like going on a blind date. Sure, it works out sometimes, but it can also be a disaster. As a real estate investor, your relationship with your property manager can save you time, money, and stress. That leaves you more time to spend working with a real estate investment firm to find your next money-making property.
Relationships abound in your life—with coworkers, significant people, and fantasy football choices. You should also establish a relationship with property management as a real estate investor. Working with a property manager may be advantageous whether you are adding your tenth house to your portfolio or acquiring your first investment property. Here are five ways a property manager may make your life easier as an investor in real estate.