Benefits of a property management company
Are you considering hiring a property management company? Thousands of property owners are turning to property management companies to handle the repetitive and complex tasks of managing rental properties. While some are going for individual property managers, others are choosing property management companies.
Today, we'll look into the different aspects of property management companies and how they can help you manage your rental properties and maximize income.
Here are six key benefits of a property management company.
1. Find the right tenants
The first challenge of maintaining a rental property is finding tenants. However, it's easier said than done. You cannot let anyone stay on your property without doing thorough background and profile checks. If your tenant commits any crime while living on your property, you'll find yourself in legal trouble.
See our checklist for finding the perfect tenant.
A property management company handles the tedious process of finding the right tenants and screening them for suitability. It may seem like a simple problem (because tenants are everywhere), but finding a good tenant is more complicated than it looks.
Hire a property management company and let them handle the time-consuming and tedious parts of screening tenants.
2. Maintain your rental property
Most real estate investors are aware of the maintenance required for a rental property –walls need to be patched and repainted, drains need to be unclogged, HVAC needs to be serviced, etc. While it's possible to manage the maintenance when you live near your rental property, it's much more difficult to do so from a distance.
That's where property management companies come in and simplify the problem. These companies will inspect your property routinely and handle any tenant requests. They typically have their own contractor network to get service requests done reliably saving you the hassle and stress of maintaining the property yourself.
3. Handle communication with tenants
Are your tenants not paying rent on time? Are you getting complaints from neighbours about the conduct of your tenants? Are your tenants calling you every other day about something wrong with the unit? These are the type of challenges a landlord deals with. If you have a full-time job being available for communication at all times is a challenge.
Property management companies handle all communication with tenants on your behalf. They definitely seek your input in tricky situations, but you don't have to be available 24/7 and handle all aspects of communication with tenants. You can set dollar thresholds for your property manager so that they can handle small maintenance issues without reaching out to you for approval.
Working with a property management company saves time and hassle for homeowners who don't have time.
4. Manage relationships with vendors
Service providers like handymen, plumbers, electricians, etc., are essential in maintaining the value of your property. Unless you have contacts where your property is located, you'll be stuck calling around during emergency situations and paying a premium.
Instead of going through the hassle yourself, consider outsourcing the responsibilities to a property management company. The deals and contracts you get through a property management company are more cost-effective, even after deducting the company's service charges.
5. Shorter vacancy periods
Vacancy periods are times when your rental property has no tenants. During these times, you don't get any rental income but you do have to spend money on the mortgage and upkeep of the property. Property owners want to minimize vacancy periods because of the financial loss it incurs.
Property management companies are incentivized to reduce the length of the vacancy period as their fees are typically a percentage of the rent received. It makes your rental property a more stable source of income and relieves you from the stress of finding new tenants when your previous tenants vacate.
6. Be compliant with rental laws and regulations
If you own a rental properties, you need to be aware of and stay up-to-date with the laws and nuances of renting a property. It’s common to run into professional tenants that know how to work the legal system. For example, in Ontario, it is not uncommon for a tenant to be aware of the backlog in cases at the Landlord and Tenant Board. Legally kicking a tenant that does not pay out of a property can take months.
