Property management includes the oversight of real estate. This may include upkeep, monitoring, and accountability. Property management firms offer their services to individuals and groups who own or operate properties.
What Do Property Management Firms Do?
Property management firms offer various services to landlords. This includes screening potential tenants, including background and credit checks. The firm takes care of paperwork and administrative details, such as drawing up a lease, processing monthly rent payments, managing records, and dealing with upkeep of the property, including complaints from tenants. The larger the property and the more tenants involved, the more time-consuming this task is.
Landlords must decide whether the tasks involved are worth the cost of property management. Some landlords may have the time, energy, and volition to handle these tasks on their own, while others might prefer to pay a firm to take care of these things.
Should You Hire A Property Management Firm?
If you’re a landlord considering whether or not to pay for the services of a property management firm, ask yourself the following questions:
- Are you confident doing basic maintenance tasks? Or, do you have a handyman you trust to take care of these things for you?
- Do you know a reliable electrician or plumber who can take care of same-day tasks?
- Are you okay with being available 24 hours a day and seven days a week should an issue arise with your tenants?
- Would you be comfortable confronting tenants over late payments, complaints, or mistreatment?
Choosing a property management firm is all about weighing the costs and benefits. If you don’t have the time or the energy to deal with tenants, you can choose to pay to delegate these responsibilities.
However, as the property owner, you’re never truly relieved of the responsibility. Even with the assistance of a property management firm, you will inevitably be contacted when certain issues arise. For instance, the firm would require your permission to replace a broken appliance with a new one. You will be likely be kept abreast of situations as they develop.
What to Consider When Choosing a Firm
For most landlords, cost is the foremost concern when considering whether to use the services of a property management company. However, there are other factors to consider aside from cost.
Other things to consider include the pricing structure. Some firms charge a flat rate each and every month, which includes certain services and is based on the value of the rental property. Others charge a percentage of the rental value, usually between 4% and 12% depending on the number of properties managed and the number of tenants. Having many properties may get you discounts.
In addition, consider the term of the contract. Most are between 12 and 24 months, with the option to renew the contract once the term is up. Some contracts automatically renew unless an opposing action is taken.
Finally, you should make sure you know exactly what services are included with the amount you pay. You don’t want to find that you have to pay additional fees for repairs or labor costs above and beyond what you’re paying to have the property managed, so read the fine print in the contract carefully.