By Ron Sudman, CEO, Management One Property Management
You’ve just bought your first single-family home rental property. One of the first questions you ask yourself is, "Who will manage it?"
You have three options.
- Do it yourself, and give up any free time you currently enjoy.
- Hire a low-cost property manager who might help collect rents and take care of maintenance and repair tasks — but little else.
- Spend more for a quality, full-service property management company that will handle all aspects of property management.
New investors often focus too heavily on the fee for property management — instead of the benefits. A quality, full-service property management company may cost you as much as 10% of your monthly rent, but the benefits can be priceless.
Benefits of a full-service property management company
When you opt to partner with a full-service management partner, that company will take over the following time-consuming tasks so you don’t have to worry about them:
- Market properties and qualify prospective residents.
- Draw up lease agreements and other legal documents.
- Collect rent.
- Respond to resident complaints.
- Handle maintenance and repair issues.
10% seems high. I could use that money in my pocket.Experience and know-how are not cheap, but they can mean the difference between success and failure for your property investment business. A good property management company can actually save you money in the long run. Here’s what you get for your money:
- Proven marketing systems and thorough, consistent resident qualification reduce costly vacancies.
- Pre-negotiated maintenance contractors who are reputable, timely, and reasonably priced save you money and keep residents happy.
- Quality, responsive service means happy residents and, therefore, fewer vacancies.
- Your time is limited. By offloading management tasks, you can focus on growing your business — or taking that long-promised vacation.
- A management company can keep you out of legal entanglements and show you how to protect your property against resident damages, saving your money and your peace of mind. This expertise is worth its weight in gold.
Build your wealth over time
One of the most important reasons to hire a full-service property management company is for its experience in not just managing your property — but also building and managing your business. A great management company knows when and how much to raise rents, and that single step is critical to making the most of your long-term investment in the property.
Consider this: Raising monthly rent by just $50 each year over a period of six years will put $12,600 in your pocket.
Seems simple, doesn’t it? However, 90% of owners who manage their own property never raise the rent. So, in essence, the money you are losing in lost rent could be going to a management company.
If you get good service and food at a restaurant, you keep going back even if they raise the prices 3-5% a year, right? The same applies to your residents. When they experience the great service of a professional management company, they won’t leave just because of a modest rent increase.
When you turn over property management to a reputable, experienced, full-service management company such as Management One, you’ll have peace of mind knowing your property, residents, and income are in good hands.