When it comes to managing your rental property (or properties), it’s easy to assume that you’ve got everything it takes to manage things yourself. It can’t be that difficult, right?
Nothing could be further from the truth. Well, perhaps if you are renting just one property to a relative who you know extremely well, has been extremely trustworthy, and has been employed for decades, in that case, yes, it might be easy.
Even in that case, if your relative should lose that steady job or if their not-so-trustworthy teenagers decide they want to live with their parent, what then? It’s even harder to make and stick to rules when it comes to family!
Ask anyone who has managed their own rentals and then switched over to a property management service. They will tell you that property management is probably nothing like what you imagine it is.
We want to set the record straight, so we are letting you in on the big secrets regarding property management services.
Secret #1-It’s Not as Expensive as You Think
Let’s face it, isn’t this the main reason most people don’t use property management? They think the expenses will add up quickly, virtually eliminating any profit they might receive from their rental.
The truth is that a reputable property management company only charges when the rental is occupied. So, if the unit is empty, you pay zero. Let’s not forget that property management services can actually increase the amount you can receive for your rental unit(s) since they are very familiar with the local rental market and they know what you can charge for your unit.
Property management services also use advertising when the unit is empty, which means you don’t have to do anything, and your property may be rented again more quickly than if you were to hang that sign on the front door.
You only pay a small percentage of the rent collected. You will know up front what all the fees are but once you find out what you would actually end up paying vs how much time you would have to spend doing everything the management company does, you will see that this service is a real bargain!
Secret #2- It’s Not as Complicated as You Think
While you might think that simply handling everything yourself would be faster, rentals often take far more time than most people realize, especially if you have a troublesome tenant or you must start the eviction process.
Property management services simplify things tremendously. You only have to become involved if the management service calls or emails you regarding an issue. Property management can also keep you up to date regarding current legislation regarding landlord/tenant laws and make sure that you are complying. Imagine how complicated a lawsuit would be if you have failed to meet new requirements?
Allowing a property management service to handle your rentals means that you can sit back and relax, knowing that someone else is showing the unit, screening potential renters, and handling evictions. You can just let the cash flow from your unit(s) keeps adding to your bank account. It doesn’t get much easier than that!
Secret #3-Property Managers Make Zero from Service Calls
If a tenant has reported that there is a plumbing issue in the bathroom, a good property management service will notify you of the problem and let you know that they are calling ABC Plumbers to fix the problem. ABC Plumbers bills the management service $50. The management service will send you a copy of the bill and the $50 is deducted from the rent you receive. The service manager doesn’t get a single dime. This is part of what your monthly fee pays for.
While it’s true that the service manager has a list of preferred companies they want to use, but this is usually because they have experience with these companies. The service manager knows that they are licensed, insured, and have proven to be reliable. This doesn’t mean you couldn’t call and tell the service manager that you wish to use someone else, but the point we are making here is that you don’t pay any extra for service calls. What a huge relief it is to know that you don’t have to do anything at all, and the problem is being taken care of.
Being your own landlord might seem like an easy position to manage, but if you are living in another town or state, if you have a full-time job, or if you are just starting out, then having a property management service can make the difference between a successful stream of passive income or a failed financial venture. We have a rental in Annapolis, MD and went with Provision Property Management, whom we highly recommend.