Even if you’re not an investment guru, you probably understand that real estate investing has the potential to be enormously profitable. But it’s certainly not easy, especially if you don’t have much real estate investment experience.
In addition to being able to evaluate deals and negotiate, you’ll need to be prepared to take on the responsibilities of a landlord if you choose to rent the properties you acquire – and if you’re not prepared, it can be oppressively time-consuming.
Fortunately, there are strategies that can help make real estate investing much easier, such as working with property managers.
The Many Forms of Property Management
No matter what, you’ll have to exercise property management for the properties you acquire. Some people choose to take on the property management responsibilities themselves, finding tenants, addressing concerns, conducting maintenance, and so on. You also have the option of finding and vetting a dedicated property manager to help you manage your properties.
For many investors, the best course of action is to hire a property management company to handle things on your behalf. This company is going to be responsible for almost everything associated with your property, and they’ll have a full team of experts and connections they can use to maximize your chances of profitability.
How Property Managers Help
How exactly do these property managers help?
- Expert advice and guidance. First, property management companies are usually staffed with real estate experts, including seasoned property managers, agents, and more. If you have a good rapport with this organization, they can help you find new properties, help you evaluate potential deals, and help you make better decisions about the properties in your portfolio.
- Inspections. Property managers also take responsibility for inspections, especially after tenants move out. This is important to make sure the property remains in good condition, in full compliance with the law, and appealing enough to attract new tenants quickly.
- Marketing. A high vacancy rate can kill your profitability in real estate investing. That’s another reason why property managers are valuable; they take over marketing and advertising for you, stimulating demand for your property and reducing the amount of time it remains vacant. If you don’t have experience in the realm of property marketing, this could be a major challenge for you.
- Tenant screening and management. Your expert property managers should also take care of tenant screening and ongoing management. They’ll help you find the best possible candidates for your property and maximize the chances of their paying rent on time and in full each month. If there are any issues with rent collection, your property managers will handle it so you don’t have to get involved.
- Conflict resolution. Similarly, these experts should be the first line of communication for most conflicts. They can help manage tenant expectations, assuage concerns, and find solutions to inevitable problems that arise.
- Maintenance and repairs. One of the biggest headaches that landlords face is conducting maintenance and repairs, especially if they have an old property or one in relatively poor condition. But with a property manager on your side, you won’t have to worry about the practical side of execution; they’ll take care of the maintenance and repairs on your behalf.
- Evictions. There are roughly 2.7 million evictions filed each year in the U.S., but per capita, they’re not especially common. Most landlords and property managers do everything possible to avoid evictions, but sometimes, they become an inevitability. When you have experts on your side, they become much easier and quicker to manage.
- Documentation. Many property managers will also keep documentation on your behalf, verifying that certain tasks were accomplished, documenting any issues with tenants, and providing financial information that you can use to file your taxes more smoothly. Keeping track of this documentation on your own is both challenging and time-consuming – and even a small mistake could cost you.
Obviously, property managers aren’t going to do this work for free. If you hire an individual property manager, you can pay them salary or hourly. If you hire a property management company, you’ll probably be responsible for paying fees as a percentage of the gross monthly rent you collect, plus additional fees for additional services.
Do You Need to Hire a Property Manager?
So do you need to hire property managers to be successful in the world of real estate investing?
Not at all. Many people are successful at handling all of the work and responsibilities themselves. It just takes a lot more time and is much more stressful. If you want to make your life easier, and gain some critical advantages over your competitors, hiring a property manager may be the best course of action.
Just make sure you do your due diligence before hiring a long-term partner.