An experienced property manager can add significant value to your investment, which is why many seasoned real estate investors will tell you that a good management company is worth their weight in gold. Here are a few reasons why a property manager can improve your bottom line:
Higher Quality Tenants
Think of tenant screening as the moat and draw bridge around your castle. It is certainly possible to get a bad tenant out of your property once they are in, but it’s a real hassle and you are so much better off never accepting them in the first place. A thorough screening process results in reliable tenants that:
- Pay on time
- Rent longer
- Put less wear and tear on the unit
- Generally cause less problems
Shorter vacancy cycles
A property manager will help you perform three critical tasks that affect how long it takes to fill your vacancies:
- Improve and prepare the property for rent – A property manager will suggest and oversee cosmetic improvements that maximize revenue.
- Determine the best rent rate – Too high and you are stuck waiting, too low and you’re losing money every month the tenant is in the unit. Determining the optimal price requires knowledge of the local market, data on recently sold comparables, and access to rental rate tools.
- Effectively market your property – An experienced property management company has written hundreds of ads and understands what to say and where advertise in order to get a larger pool of candidates in a shorter period of time. Additionally, because of their volume they can usually negotiate cheaper advertising rates both online and offline. Lastly, they are familiar with sales and know how to close when they field calls from prospects and take them on showings.
Better tenant retention
While it’s easy to see the effects of lost rent, there are other equally serious problems with a high tenant turnover rate. The turnover process involves a thorough cleaning, changing the locks, painting the walls and possibly new carpet or small repairs, not to mention all the effort associated with marketing, showing, screening and settling in a new tenant. This is a time-consuming and expensive process that can often be averted by keeping tenants happy and well cared for.
A good property management company will have a time-tested tenant retention policy that ensures happy tenants with lengthy stays in your properties. These kinds of programs require a consistent, systematic approach, which is where a good property management company will shine.
Lower maintenance and repair costs
By hiring a management firm, you gain access to both their in-house maintenance staff, as well as their network of licensed, bonded and insured contractors who have already been vetted for good pricing and quality work. This can translate into significant savings compared to going through the yellow pages and hiring a handyman yourself. Not only is the firm able to get volume discounts on the work, they also know the contractors and understand maintenance issues such that they are capable of intelligently supervising the work.
Increase the value of the investment
Preventative maintenance is achieved through putting systems in place that catch and deal with maintenance and repair issues early on, before they grow into larger more-costly problems. This requires a written maintenance check program, detailed maintenance documentation and regular maintenance visits. The management firm can also offer you suggestions and feedback on upgrades and modifications, both how they will affect the rent you can charge, as well as their impact on maintenance and insurance.
Personal benefits for owners
Less stress – Avoid having to deal with middle of the night emergencies, chasing down rent, evicting people from your property, tenants who wreck your property, rental scams, lousy vendors, piles of paperwork.
More freedom – Live and invest wherever you want with the constraint of needing to be near your properties. Additionally, you can live and travel without the requirement of always being available in the event that your tenants have a need you have to tend to. Once you have found a good management company, it doesn’t matter if you live in the same state. Some landlords live in other countries and simply collect their check every month without ever seeing the property.
Free up more of your time – Time is money, and for many investors, their time can be more profitably spent in areas other than servicing their properties. When you focus on asset management you’re working ON your business, when you manage your own properties you work IN it. Additionally, you have more time to spend with family or friends doing things you enjoy.
Scheer Partners provides high quality, reliable property management, and maintenance services. Our team performs so our clients can achieve ideal results for their assets.
Our team of highly trained and qualified property managers bring extensive and diverse property management experience. As owners and managers of commercial real estate, we pride ourselves on our ability to understand an owner’s perspective of asset needs.