As most landlords know, renting out your piece of real estate can be a real cash cow, but that cash flow often comes with a tremendous headache. Midnight calls from tenants who have overflowing toilets, late rental payments that you have to chase down, and the hassle of advertising the home when you have a vacancy take a lot of the joy out of making money off of rentals. One way to enjoy the income while eliminating much of this stress is to hire a property management company.
These companies work as the go between for you and the renter. When you hire a property management firm, the renter does not even have to know who you are. While you still have the power to make the final decisions about the property, the firm handles the day-to-day interactions with the renter.
If you have a vacant unit, the firm will handle the advertising for you. Because the firm will have more contacts in the field than you do and a larger audience than you have, you will find that your unit gets filled much more quickly with their help. Also, the property management company will take care of screening potential renters. Depending on the agreement you have, you may still be able to have the final say as to whether or not a renter is approved for the unit, but the daily drudgery of finding an appropriate renter is no longer your concern. They will also handle the pre-move-in inspections and the inspections necessary after a tenant moves out.
Once the unit is filled, you can step back and watch the profits come rolling in. If there is a concern, the firm will handle communication with the renter. If that pipe bursts in the middle of the night, you will not be called. The renter calls your representative in the firm, who then makes the necessary arrangements to have the problem fixed by a maintenance provider. You may not even know there was a concern until you check in with the company or get a phone call the next day.
The property management company will also make the necessary arrangements to collect your rental payments. If a tenant is late making a payment, the firm will do what is necessary to collect. In some agreements, the company will also take over paying the mortgage, insurance, and taxes on the piece of real estate. You literally have to do nothing but enjoy the income that is sent your way after all of the bills have been paid.
With all of these benefits, you are likely wondering what the drawback to hiring a property management company must be. The main factor that prevents some landlords from hiring one is the cost. You will pay for these services. You must weigh the cost against the amount of time you will save, time which you can then use to pursue other income-making endeavors or simply enjoy the fruits of your investment labor.