2022: Why Should You Hire a Property Manager?
“Why should I spend money on a property management company if I’m trying to make money from my real estate investment?”
That’s the first question asked by many a fresh property investor, and we understand why. When you’re throwing yourself into the tumultuous back-and-forth of expenses and profit margins, every dollar spent can look easily like a dollar lost. That goes double for our somewhat wintery economic conditions; if you’ve had to scrape up whatever capital you could to make that first big real estate buy, trust us that you’re not the only one.
No matter what, a real estate investment is a good decision, and certainly among the safest investment options. On the smallest scale, you’re planting the seeds for yours and your family’s financial stability. On the largest scale, this could be the beginning of an expansive and hugely profitable real estate portfolio.
But if you’re planning on going it solo, you’ll probably realize sooner rather than later why most serious property investors choose to enlist the services of a fully staffed, dedicated property manager like Utopia Management, able to service all kinds of properties from single-family houses, to apartments, to commercial spaces. So we’ll save you some frustration. Here are just a few reasons you should be working with a property manager as we enter 2022.
Because there always seems to be demand for rental housing, it’s not uncommon for new property investors to totally forget about one of real estate’s most essential subfields: marketing. Marketing your property is just as important as ensuring the property itself is in well maintained and in show-ready condition. Who will you show it to if nobody knows about it?
Property managers almost always have real expertise in property marketing, with many of the larger firms sporting a dedicated marketing department. That’s because the longer a rental property sits vacant, the longer it doesn’t earn money, which isn’t good for any landlord. A good property manager will make use of all available advertising platforms, and in many cases, will have new tenants already screened and waiting to sign a lease before the old ones have moved out.
2. Tenant Relations
Your interaction with tenants begins before they even sign a lease and may sometimes extend beyond when they leave. Here’s a breakdown:
- Answering phone and email inquiries about vacant units
- Showing vacant units
- Financial screening and background checks
- Lease signing
- Payment processing
- Repair and maintenance, including maintenance emergencies
- Addressing complaints and grievances
- Possibility of eviction, which may involve legal or police action
- Returning of security deposit, or handling of disputes regarding security deposit
How much of that do you want to deal with?
People invest in property as a way to build passive income streams. Passive income allows us to make money when we sleep, or while we work a day job. If your valuable time is being spent answering your tenants’ calls or wrestling with them over stipulations in the lease, is your rental income truly passive? Most well equipped property managers handle more than the physical upkeep of a rental property. Their services include every aspect of the property’s administration, and because they are fully staffed and rich in experience, they are usually able to do a better job than overworked landlords.
General Real Estate Expertise
Here’s the truth about real estate regulations: you are not an expert, and you are certainly not a lawyer. (Unless you are one, in which case you probably already know you should hire management.)
Property management firms will hire staff with diverse experience in the real estate market, including those well versed in the laws concerning your investment. Real estate is a highly regulated market. The way your rental property operates is beholden to local laws, state laws, and federal laws. A good management firm may even have a dedicated legal team advising on every move. Landlord-tenant law is especially important, and is different in every state. If you’re worried about expenses – and who isn’t? – then the last thing you want is an aggressive lawsuit coming your way.
3. Payment Infrastructure
What’s the most important part of running an investment property? If you said “successfully collecting rental payments,” you’re right. If you don’t collect your tenants’ rent on time every month, you may find yourself in hot water, but just like tenants will often slip up and forget to pay, it can be hard for landlords to keep up with payments, and even harder and more frustrating to chase down late rent.
If your manager is a modern firm with a huge collection of serviced properties, there’s a good chance they implement an electronic payment system for collecting rent. Online payments are preferred by tenants because of their ease of use compared to handing in paper checks or cash, and as we move into 2022, with Coronavirus still a looming threat, people are more comfortable than ever with online payments due to health and safety concerns. Payment portal systems are great at keeping track of who has paid and who hasn’t, and will automatically add late fees when the grace period has passed, which both discourages late payments and provides you with compensation for missed income.
4. Reducing Repair Costs
Landlords who decide to skip on hiring a manager often do it partially because they think they’ll be able to handle the physical maintenance of their rental property. To most, having to commit time and money to repairs and landscaping once or twice a month seems manageable. In reality, however, there’s no guarantee that your property or your tenants will limit their needs to meet your preferences, so DIY landlords often find themselves strapped for time and financially in over their heads as they struggle to find and hire affordable, trustworthy contractors.
Thankfully, property managers who have been in the game for years will almost always have a familiarity with local contractors, if not a stable and positive working relationship with them. They will know who does the best work and who has the most affordable material cost. In other situations, they may know a low-cost supplier for raw materials. Most property managers also retain their own maintenance staff, so consider the labor hours already paid for.
5. Remote Landlord
When you’re a DIY landlord, you need to show up sometimes, and sometimes could mean multiple times a week. Like we said before, having to contribute your time and sweat to your rental property defeats the benefits of a passive income structure. But another drawback that isn’t usually discussed is how being a DIY landlord keeps you geographically tied to your property. As long as you have people depending on you for the upkeep of their living space, you’re not moving.
With a property manager, though, you can be entirely remote. You don’t have to live in the same state, or have any communication with your tenants whatsoever. Your job will only be to collect rental income while your manager handles any issues that arise onsite. This also means you can invest in property that’s nowhere near where you live!
Hiring a property manager gives you real freedom, and isn’t that what passive income is about? We all want freedom, and when we’re tied to a place, or a job, we don’t exactly have it.
Get Kings County California Property Management
For Kings County California Property Management Contact Utopia Management today by calling us at (800) 294-4656 or click here to connect with us online.