Once you have invested in a rental property, the responsibility of maintaining and running the property can become overwhelming. For many owners, the logical solution is to hire a Residential Property Management company to oversee their rental property. But, is this the right decision for you? Here are the top 5 reasons to consider why you should hire a residential property management company and how the benefits far outweigh the costs.
1) Rent Collection: Professional residential property management companies have systems and strategies to improve rent collection and on-time rent payments. This allows you to ensure swift and consistent rent collection. Quick and consistent rent collection is absolutely critical in this real estate market where good cash flow can mean the difference between success and failure as a real estate investor.
2) Local Knowledge of Rental Rates: PM's have extensive local knowledge of rents and the ability to determine the highest rental rate possible for your property. With the internet and the ability to do large scale searches for rental properties, potential tenants know if your property is overpriced, even by $25. Overpriced properties sit empty while other properties get rented. Knowledge of rental rates is a key factor to fast rentals and quick cash flow.
3) Tenants Screening: A PM requires a detailed written application from each adult with photo identification. Additionally, PM's will run criminal, social security, and public notice (bankruptcy or judgments) searches to determine if the application is accurate. PM's will also call past and present employers, landlords, and other references.
4) Marketing Expertise: PM's have years of experience in how to best rent out your properties so they are rented as soon as possible. PM's use both offline and online marketing to maximize your properties' exposure and find qualified tenants quicker.
5) Low Costs: A PM should only be charging around 6% to 10% of the monthly rent collected.