October 30, 2013

10 Reasons To Hire A Property Manager

Why would you even consider a property manager?

For one thing, you decided to invest in a rental property, but don’t know what to do next. You’re not alone. The realities of maintaining and running a rental property can quickly become overwhelming- even to the savviest investor. Many times, people choose to hire a property manager to help them in the day to day tasks, which could be just the answer you are looking for. To help make up your mind if hiring a property manager is right for you, here are 10 reasons that could help influence your decision.

1. Collecting and Depositing Monthly Rent Payments.
If you’ve ever worked in the billing department of an organization, you know that securing payment from clients and patients can be difficult, not mention awkward. A property manager has his/her own systems in place to effectively collect rent and maintain on-time payments. Especially if you are a small investor, with a limited number of properties, not being able to maintain consistent payments is going to significantly affect your cash flow.

2. Rental Rates.
 A property manager is going to make sure your rental rates are competitive, which is the key to securing (and keeping) tenants in your property. Their job is to know the rental market, knowledge which most likely isn’t your forte.

Housing Regulations and Property Law.
There is a multitude of applicable laws and regulations that you are going to need to abide by when renting and maintaining your rental property. These include local, state and federal regulations, as well as fair housing regulations (such as the ADA). A property manager can help you avoid lawsuits by keeping up to date and in compliance with these regulations.

4. Marketing and Advertising.
A good property manager is going to have experience in offline and online marketing, as well as local direct mail opportunities, which will increase the exposure of your properties.  Carrying a vacant property can be extremely expensive, and is an expense you want to avoid whenever possible.

5. Inspections.
Being extra vigilant in the care of your rental property is critical to the maintenance of your investment. Through routine inspections, a property manager can find and repair problems before they grow into expensive endeavors. It is standard for property managers to perform inspections before a tenant moves in, during their lease, and after the tenant moves out.

6. Tenants.
Securing tenants can be a time consuming process. Depending on the extensiveness
of requirements for your rental properties, a property manager can take care of securing all
criminal background and security checks, credit reports, employment verification, and previous landlord references. In addition all tenant disputes, conflict resolution and emergency maintenance will all go through a property manager, who will involve you at his or her discretion.

7. Access to Professionals.
A property manager has existing relationships with maintenance workers, tradesmen, vendors, supplies and contractors that you do not have. This can save you significant time and money when it comes to maintenance on your rental property, not to mention ensuring quality work.

8. Time Management.
By having a property manager that takes care of the routine daily tasks, you are free to focus on other investments and/or your own career.

9. Remote Locations.
If your investment property is in another city or state, it’s simply not possible for you to oversee management and maintenance of the property and its tenants. A property manager can be where you can’t, and can take care of all the details you don’t have access to.

10. Money.
Most property managers charge a percentage of the monthly rental rate which can range anywhere from 8-15%. The cost is actually quite nominal when compared to all the
services a property manager can provide, which frees up your personal and professional time.

Property Management and the Law

A critical element of successful property management is compliance with laws and regulations set forth by your individual state as well as federal oversight. However, even having the most knowledgeable and experience property manager at your disposal, or being an experienced real estate investor yourself, doesn’t make you immune to problems. In certain situations, you may benefit from a lawyer’s assistance, whether it is for representation in a lawsuit or simple advice. Usually these situations have to do with general property management and the law.

Property Management and Eviction

You should be realistic that property management of your rental property could potentially involve evictions. No one likes to evict a tenant, but it might become unavoidable if the tenant’s inability to make timely payments or destruction of your property becomes a risk to your cash flow and investment. The eviction process is very detailed and can become very complicated, especially if issues such as bankruptcy are involved. Because most judges will favor the tenant, it is extremely important to educate yourself on the process, follow the specific steps, and keep detailed documentation. Although many landlords successful evict tenants without a lawyer’s assistance, but it is always better to at least talk with a lawyer in advance.

Property Management and Discrimination

Even if you diligently comply with fair housing laws you could still be accused of illegal discrimination from a tenant who has been evicted or been turned down for renting. However, being accused and being sued are very different things, and you will probably want to consult a lawyer if it is the latter. Going to court can be extremely expensive, in addition to violation fees if you are found guilty. In addition, such charges could damage your professional reputation, or that of your investment firm. It is important to educate yourself on the statutes of illegal discrimination so that you do not unknowingly put yourself at risk.

Property Management and Welfare of your Tenant

Effective property management includes the maintenance of the property which is being rented, and it is your responsibility to keep the property up to date with all repairs. If one of your tenants claims he/she was injured because of your property, it will be an extremely sensitive and delicate issue. Especially if you do not believe you are at fault for your tenant’s injury, it is best to bring in a lawyer that is not personally invested in the case.

Property Management and Damage

Similarly to the personal injury scenario mentioned above, it is also possible to be sued for property damage. Tenants can claim ineffective property management of the rental property which resulted in unrepaired utilities that in turn damaged a personal item. An example of this could be a leak in the plumbing which caused massive flooding throughout the apartment. Part of basic property management does include acquiring liability insurance, which would probably be at your disposal. Depending on how large of compensation your tenant is seeking, you may choose to just consult with a lawyer and handle the situation yourself.
As you can see, there are always going to be situations that require some knowledge of the law, and how it pertains to property management. It’s a good idea to learn what is the right of yourself as a landlord, in addition to the rights of your tenants.

Any questions … fee free to contact us at 352-404-8960 or ScatesRealty@gmail.com

Thank You.

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