5 Situations When a Property Manager Can Improve Your ROI
Whether you’re a small scale landlord or have a large portfolio, a property manager might be able to make your life easier.
If you’re a landlord, you probably already see the draw of hiring a property manager. They offer convenience; instead of managing a property all by yourself, a manager can take care of everything and simply put the money in your pocket. However, many property owners choose not to hire a manager because they’re worried that the added monthly expense will hurt them in the long run.
Believe it or not, it’s not always so black and white. While on the surface, a property manager is an additional recurring cost in your investment, in many cases they can actually end up saving you money.
A typical property manager will cost you 8-10% of your rental revenue, but most of all of this can usually be made back through the benefits that a property manager offers. You may even end up making more in the long run than you would without one.
Here are a few examples of situations where a property manager could make you more money on your rental:
1. You don’t want to do your own maintenance or renovations
Unless you’re a skilled carpenter, electrician, and plumber combined, you probably have to hire various construction and repair companies when renovation work needs to be done on your property. As an individual customer, you’re likely to be met with standard rates.
With a property manager, you can save a significant amount through discounted rates. A good property manager will have a select few companies that they’ve developed strong relationships with; typically larger management companies will have the upper hand on this front.
In exchange for acquiring customers for these companies, they can offer their clients discounted rates. Over time, this adds up in dollars saved.
2. You want help screening tenants
Even if you think you could have been a private investigator in a past life, manual tenant screening is time-consuming, difficult, and puts you much more at risk to have, let’s say, less-than-ideal tenants. Efficiently screening tenants is crucial for ROI.
Property managers have developed thorough and consistent tenant screening processes. They help you get higher quality tenants that are more likely to take care of your property and rent for longer periods of time.
While this may seem like a small difference, high quality tenants save you headaches and money by avoiding property repairs, extending rental periods, and ensuring timely rent payments. Property managers have more experience filling units with good tenants than the average landlord.
3. You’re employed full-time and can’t devote a full work week to managing your property
Property managers have the ability to give your property attention 7 days a week. This means better and faster communication with tenants and ensuring tenants are happy.
The value of satisfied tenants can’t be overstated! When tenants feel taken care of, they’re much more likely to renew their lease and pay rent on time.
When there’s an issue on the property, a management company will be able to handle it immediately. If you’ve ever had to take time out of your work week to deal with an issue on your property, you’re losing money.
Regular maintenance checks help to ensure problems like leaks don’t go unnoticed, preserving your property and avoiding costly repairs.
Additionally, running a short-term rental is even more time intensive than a long term rental. Finding a property manager that specializes in short term renting can be a game changer for your ROI.
4. You aren’t a real estate agent or you don’t have a marketing team for your property
One of the biggest ways that property managers save landlords money is by reducing vacancies.
In addition to increasing the average rental period of your tenants, managers minimize the time your property is empty when tenants do move out. A property management company has the resources to market your property efficiently and effectively.
Property managers often use high-quality property photos and advertisements, market to their existing community of prospects, and offer immediate showings. This helps your property get filled as quickly as possible to reduce your vacancy losses.
In some cases, the money you make from reducing vacancies alone can pay for a property manager.
5. You get too personal with tenants
Developing a friendly relationship with tenants is important, however, landlords who are too nice can run into problems. Tenants getting too cozy with the landlord makes them more likely to abuse lenience on late rent or other policies.
A property manager will keep consistent and steadfast communication with tenants, so there won’t be any exceptions to the rules. Additionally, a property management company will help you determine a fair rate for your property, and will make sure you raise the rent to market value every year.
If you’re someone who struggles with saying no or feels emotionally burdened when dealing with tenants, a property manager lifts that weight off of your shoulders entirely, and ensures a fair relationship between landlord and tenant.
Find your next rental property
Hiring a property manager will leave you more time to look for fantastic new real estate investment opportunities. If you want to find off-market deals in your market, check out Sundae’s Marketplace. Learn more about leveraging Sundae to help find your next deal.