As the owner of a small-scale rental property, you may be on the fence about whether or not to use a property management company. Especially if you’ve never managed an income property, it can be tempting to assume that property management duties amount to “find tenants, sign lease, receive rent check,” along with handling some minor maintenance issues from time to time.
In reality, managing tenant relations, staying on the right side of the law, being on call for any emergencies that come up, staying on top of home maintenance, conducting periodic property inspections, and handling the accounting and taxes can be a time-consuming effort.
Professional property managers have developed systems that allow them to manage all of the above with maximum efficiency. Their expertise allows them to prevent problems before they arise, as well as handle any issues that do come up with minimum disruption to your revenue stream.
Not only is property management affordable, using a property manager can actually increase your property’s overall profitability. Most property managers charge a small percentage of your monthly rent in exchange for comprehensive services that range from finding and screening tenants, to handling emergency maintenance, to keeping the books and preparing year-end taxes.
For what usually amounts to $100.00-$200.00 per month, you can outsource all of the responsibilities related to managing your rental property. When you weigh that fee against the 10-15 hours per month you’d likely spend managing the property yourself, not to mention being constantly on-call in case of emergency, the tradeoff becomes pretty clear.
You should also consider that property management companies are experts at preventing vacancies and turnover costs, the two factors that can sink your profit margins almost instantly. As the owner of a single-family rental home, keeping your property filled is especially important—your total revenue is likely generated by a single set of tenants.