Rental property business can become a magnificent source of extra income if you can commit to all the responsibilities that come with it. From marketing and legal issues to maintenance and tenant troubleshooting, running a rental unit alone can take up much of your time and effort quickly. Contemplating whether to hire industry professionals to run your rental business can be quite challenging, mostly due to a lack of information. You might be asking yourself should I use a property management company, what does a property management company do, which services are included, how does it benefit you, and whether it’s suitable for your needs?
Discover Why Property Management Is An Essential Piece Of Rental Business Success
Find all the relevant answers in this post. We will also outline how it can positively impact your lifestyle in general. By the time you read this article you will have a better understanding of how beneficial property management companies really are, and whether their services are fit for your needs.
Swell Property: Premier Property Management Company Servicing San Diego Area
Our full-service boutique agency is recognized for offering first-class property management services in San Diego. We are experts at handling daily responsibilities and specific industry-related tasks like advertising, price forming, rent collection, maintenance, repairs, legal assistance, 24/7 emergencies, bookkeeping, and so much more. Our skilled and dedicated managers, attorneys, realtors, contractors, and paraprofessionals all work together to boost your rental income and save your time and efforts. For over 20 years Swell Property has collaborated closely with thousands of rental owners and landlords while overseeing countless properties. Our business model includes two types of service packages, intended to cater to each owner’s needs: full-service package and tenant placement package. Furthermore, our team is highly skilled at operating all types of rentals, from single and multi-family homes to townhouses and apartments. Reach us via our contact page or call us at 760.452.2345 and discover a smooth and stress-free rental management experience.
What Is Property Management?
A property management company is a third-party company, hired to take care of rental unit’s daily operations. “Turn-key” services mean they perform rent collection, marketing, interviewing, accounting, maintenance, lease agreements, tenant issues and more.
10 Benefits Of Hiring A Property Management Company
Listed below are just some of the most relevant benefits you get to enjoy when you hire a property management company:
1. Price Forming
Setting the optimal rental price is one of the foundations for the success of the rental business. The right price attracts the right tenants and keeps occupancy rates high. Determining rental price depends on many aspects, like location, property size, amenities, market trends, and the condition of the unit. A property management company will utilize its knowledge and expertise to analyze this data and form an accurate price that will attract the right tenants and minimize vacancy rates. In turn, you, as an owner, will have increased ROI.
2. Professional Marketing & Advertising
If you want to advertise your rental property efficiently, it is best to hire professionals. A skillful property management team will showcase your unit even in the most competitive markets by utilizing innovative and powerful marketing strategies. Marketing and advertising set of services involves professional real estate photography, captivating ad content, agent showing, wide coverage, high traffic website listing placement, data tracking & analysis, offline signage, and others. These techniques will increase visibility and appeal to a larger audience fairly quickly, thus increasing occupancy rates.
3. Tenant Screening
This type of service is performed in order to find desirable, loyal tenants who will be committed to remain at your property long-term. Tenant screening is a meticulous process that involves employment and income verification, background check, credit checks, and rental history check. Established property management companies have performed thousands of screenings before, and will be able to quickly see the red flags and pinpoint potential issues with tenants. They have proven screening procedures that will help identify occupants who will:
- Stay long-term
- Pay their rent strictly on time
- Care about the property
- Cause fewer issues
4. Increased Long-Term Occupancy Rates
One of the main goals of hosts and landlords is to have loyal residents who will commit to long-term occupancy. By retaining the same tenants for long periods of time, owners avoid issues like vacancy expenses, lock changing, replacing damaged furnishings, wall painting, repairs, new screening, and new advertising campaign. All of these time-consuming and expensive projects can easily be avoided if you manage to keep your loyal renters happy. Property managers are masters at tenant retention. They have a systematic and streamlined approach to keeping the residents satisfied. Furthermore, they are better prepared for turnovers, working quickly and efficiently.
5. Efficient Rent Collection
Securing tenant payments on time is another significant part of the rental business since it ensures steady cash flow. Occasionally, it can be challenging to achieve this goal. Sometimes, landlords can be too permissive towards unreliable residents who do not pay their rent on time. This is where professionals come into play. They have reliable and effective rent collection strategies to acquire and maintain regular, on-time payments. Moreover, clients have the convenience of choosing the preferred payment option – online or in person.
6. Tenant Relations
After placing reliable tenants, a property management company will handle all aspects of the tenant-landlord communication. This includes general inquiries, routine visits, emails, emergency maintenance calls, inspections, and complaints. Your appointed property manager will be the main point of contact for the occupants, and you will be provided with regular status updates regarding each issue, which will keep you on top of things at all times.
7. Lower Maintenance and Repair Expenses
Emergency repairs and regular maintenance are very important for maintaining the value of the property high. Property managers have established long-lasting relationships with local licensed contractors, tradesmen, and suppliers, which is highly beneficial in a business like this. You will be able to get a more affordable price for their services, plus, you will not have to supervise the projects or deal with the tenants directly. The services that can be utilized from trustworthy vendors include renovations, property turnovers, inspections, regular maintenance, landscaping, etc.
8. Legal Assistance
Another bonus is compliance with local, state, and federal laws. Property management companies are knowledgeable about the Fair Housing Acts and all other applicable laws and regulations that landlords must comply with. They will handle evictions, lease signing and lease termination. In addition, with their help, you will avoid potential disputes and protect yourself from costly lawsuits and liabilities.
9. Real Estate Experience
The majority of property management staff holds real estate licenses, which means they are experienced and educated in the real estate industry. They are thoroughly familiar with the local market trends, price forming, tenant troubleshooting, lease breaks, marketing, and other relevant factors. Although it takes quite a bit of time and energy to run a rental unit, property managers are highly experienced at what they do and know the best ways to tackle even the most sophisticated issues.
10. Off-site Ownership
If you do not reside close to the estate, you can hire a local property management agency who lives close by to operate the rental and handle issues in a timely manner. Furthermore, your investment options are broadened, as you are not limited to investing only within your radius.
Rental Owners’ Personal Benefits
Apart from a positive influence on your rental business growth, there are also benefits that will improve your quality of life.
Increasing Your Revenue
The most prominent advantage is certainly maximized profit. Property management companies are experts at maximizing occupancy and reducing overall expenses. In addition, they will preserve optimum value of your real estate, while securing constant cash flow, which will give you peace of mind.
Alleviating Stress
By hiring a specialist, your stress levels will be reduced. You will not have to worry about administrative tasks, late-night emergencies, coordinating evictions, navigating complex legal issues, or having to find contractors in the middle of the night.
Gaining Extra Time
Another valuable benefit is saving time. Your designated property manager will take daily responsibilities off your plate, giving you extra time to spend doing other things. Instead of tackling water leaks or appliance repairs, you will be able to focus on expanding your business or spending time with your family and friends.
Understanding The Drawbacks
The cons of having a property manager depend on how involved you are in operating a rental. Two distinctive disadvantages include:
- Added expense – One of the obvious disadvantages is service cost. Fees are typically charged monthly and generally represent a percentage of monthly rent payment (usually between 8-12%). Moreover, there may be additional fees, depending on which company you choose. Some agencies will charge extra for marketing, advertising, leasing, upkeep, cancellations, renewals, and similar services. Make sure to confirm all fees and charges before signing up with the specific agency so that you are clear and what the total expense would be in the end.
- Lack of Involvement – There are landlords and hosts who would rather stay on top of things, and have a hands-on approach. Ask yourself whether you are willing to give up control. If your answer is no, then hiring a third party to professionally run your rental business does not seem like a good fit for you. Self-managing would be a more suitable option for you. Professional managers would avoid involving you in trivial issues and smaller disputes, as they are highly experienced in tackling these issues quickly and correctly. Although they are aware that your real estate is one of your most precious assets, hovering over them may negatively impact their performance.
Final Thoughts: The Pros Outweigh The Cons
The decision whether or not to employ a property manager depends on how much time and energy you are ready to spend on landlord tasks and duties. Understanding your short-term and long-term goals will help you decide whether skilled professional help is the right fit for you. And although this service costs extra money, think of all the things that you will get in return. Some of the benefits are real estate expertise, time savings, tenant screening, long-term occupancy, marketing, increased rental value, and legal assistance. The cons include a lack of control and added expenses. As you can see, the benefits overshadow the cons by far and it is just a matter of personal preference whether you will hire industry specialists with extensive experience to take care of your property.
Related Resources
What Does a Property Management Company Do?
How to Advertise Rental Property Effectively
Rental Property Maintenance Checklist Every Landlord Needs
10 Must-Do Rental Property Upgrades in San Diego
Guide to Landlord Insurance: What Every Property Owner in San Diego Must Know
AuAbout the Author
David Miller is Real Estate Advisor at Swell Property. With over 30 years of experience in real estate, negotiations, and contract management, I’m equipped to handle all your needs with the highest level of professionalism, integrity, and trust. Whether you’re eyeing a new home, an investment property, securing the best mortgage, or aiming to enhance your property’s value, my focus is on providing personalized guidance and strategy for your success. I listen to your needs attentively, ensuring that my expertise aligns perfectly with your real estate goals. My clients’ satisfaction and referrals are the true measure of my success in San Diego’s dynamic real estate market. If you’re searching for a real estate professional who’s deeply committed to your success, I’m eager to demonstrate my expertise and win your trust. Let’s connect and start this journey together.
