Property owners often see hiring a property management company as a costly option. After all, property managers usually keep a percentage of the rent when they work for you. However, you should also consider that hiring a property manager will also save you money in a lot of ways. Once you balance the books, you're likely to notice that you more than make up for that fee. So how can you expect a property manager to help you save? In more ways that one!
1. Avoiding problem tenants.
Tenants that don't pay. Tenants that ruin the carpets. Tenants that trash the place before moving out. All of these tenants end up costing you money. Property managers have experience weeding out these tenants from the get-go, which can save you a small fortune. If you avoid renting to a tenant who would have skipped 2 rent payments, you've already recouped the cost of hiring a property manager without even considering the other savings on this list.
2. Setting the rent price fairly.
You might be able to rent your space for more than you are currently charging. A property management company can look at comparable rentals in nearby neighborhoods, do some calculations, and make sure you're charging what the place is worth. If they raise the rent just a little bit, this will help recoup the cost of hiring them. Many private landlords under-charge because they're so afraid to over-charge and have their space sit empty, so it's really common for property managers to recommend raising the rent a bit once they take over.
3. Hiring cheaper contractors.
There are a number of contractors you end up paying when you own a rental: HVAC technicians, plumbers, and landscapers are just a few of them. Property management companies often get a high-volume discount with these contractors, and they pass the savings on to you. For instance, an HVAC company may charge you $300 for repairs personally, but only charge $275 to your property manager who is sending them work every week. These little savings can really add up over time, especially when it comes time to make repairs and clean the apartment between tenants.
Hiring a property manager will cost you a percentage of the rent. However, if the manager can save you from bad tenants, enable you to charge a bit more, and get discounts on work, hiring them will actually save you quite a lot of cash. Contact a company that offers property management services to learn more.
When you are faced with a down market, there are a lot of things that can run through your mind as a homeowner. If you had to sell, would you be able to make your money back? What will you do if you have to sell your property at a loss? Do you think you are ready to buy a new home?
Although there are a lot of things that are important to think about, the fact of the matter is that understanding real estate challenges is instrumental to making money with your property. From moving forward with new ideas about real estate to working with the right professionals, it pays to read up on the market. Learn more today!