Five Ways Property Management Companies Can Save You Money
Rental property owners are usually concerned about their property’s bottom line, whether they’re trying to minimize their losses for a home they couldn’t sell or maximize income for an investment. And with income in mind, hiring a property management company may seem like just another expense.
But for many owners, professional management could actually save money in the long run and increase their return on investment. Here are several ways that a property management company can be a cost-effective solution.
- Vacancy Prevention: Preventing vacancies ensures consistent cash flow over time. Great property management companies focus on placing qualified tenants in rental properties, which decreases the likelihood of evictions, nonpayment of rent, and other potential problems. Professional managers are also responsive to tenants, resolving any complaints and working to make sure they are happy in their home. This increases the chance that they’ll want to renew their lease, preventing the costs of turnover and vacancies.
- Reduction of Vacancy Times: The faster you find a suitable tenant, the sooner the rent checks start coming. The right property manager will be able to help you set a competitive rent rate, market your property strategically, and screen potential tenants to ensure they are qualified. A professional management company with local expertise will know the property’s neighborhood and ways to reach likely renters. In addition, a management company will have the time and resources to effectively market your property using targeted, high-quality advertising techniques, which will further minimize vacancy times.
- Tenants That Are a Great Fit: One of the major keys to having a profitable rental is a systematic, thorough tenant screening process. Property management companies typically have a legally sound, comprehensive process for checking credit rating, rental history, employment, and criminal background of potential residents to ensure that tenants will pay rent in a timely manner and take good care of the property. Tenants who don’t pay rent, damage the property, or need to be evicted can cost thousands of dollars in lost income, repairs, and legal fees. A professional screening and selection process also minimizes the possibility of fair housing violations and lawsuits.
- Efficient Rent Collection Process: A property management company typically has a structured process for collecting rent. This ensures timely, dependable cash flow as well as adherence to all legal regulations for rent collection and dealing with late payments. This allows you to avoid legal problems with your tenants an present a reliable record of payments if issues arise.
- Budget-Conscious Property Maintenance: Property owners can plan to spend the equivalent of 1 to 2 months of rent on property maintenance annually. But a good property management company can often get better prices because of the volume of work they oversee and their established relationships with contractors. Lower cost maintenance and repairs save owners money in the short term, and a well-maintained property also improves long-term value. Fast, quality work helps keep tenants happy and encourages them to take care of the property. Furthermore, professional property managers know the importance of being diligent and proactive when it comes to preventative maintenance, can spot potential problems early on, and guide you the most cost-effective upkeep methods.