Investing in rental property can be a great way to generate cash flow, and often, some pretty decent long-term returns. But when it comes to the actual work of rental management—that’s something that many landlords don’t enjoy.
When first starting out, overseeing the rental yourself might seem like a logical first step for many investors. After all, if you just have one rental, and it’s located nearby, then it would make sense for you to manage it. But over time, something usually happens. Maybe the investor decides that they’d like to add a few more properties to their portfolio, or maybe they decide to invest out of town, or maybe they find that they’re just tired of spending all of their free time at their rental.
If this sounds familiar to you, then you’ve come to the right place. One solution that many landlords turn to is outsourcing to a property manager. Outsourcing your rental management doesn’t just mean a time-savings for you—although that is a significant benefit—it can also mean less stress and often can save you money as well. Depending on your approach, outsourcing can be a vital part of a strategy to grow your portfolio, allowing you to increase your returns. When you outsource the day-to-day tasks, you’ll be able to step back and focus on the high-level ones, like finding new rental properties or focusing on your investment strategy.
In this article, we’ll take a look at some of the benefits that come along with property management. See for yourself why you’ll want to consider this option.
How Does Property Management Work?
Before we get started looking at the benefits that come from property management, it is important to define exactly, what property management is. So what is it?
A property manager is someone who oversees your rental property. A good property manager won’t just be there to collect the rent and pass it on to you. Instead, they’ll be involved with your rental every step of the way, allowing you to maximize your returns on it. A property manager will handle everything from advertising and marketing to screening tenants, handling maintenance, fielding tenant communication, and much, much more. A good property manager will be able to help you price your rent competitively, and oversee your property professionally, all while working in your stead to not only oversee the property, but to help you manage it in a way that will maximize your profits. A good landlord will also be very familiar with landlord-tenant law and will help you to ensure that your rental is managed in a way that’s in compliance with the law as well. They’ll know what rules and regulations pertain to different aspects of property management, including tenant screening, policies, and more.
Tasks that a property manager can handle:
- Preparing rental agreements
- Enforcing lease agreements
- Arranging for maintenance
- Following landlord-tenant laws and regulations
- Being a presence for long-distance landlords
While hiring a property manager is especially important for those who own property out of town, it can also be a good idea for those who aren’t. You don’t have to have an out-of-town property just to take advantage of the benefits that come from hiring a property manager.
Now, let’s take a look at a few benefits that come from outsourcing your property management tasks.
Benefits of Outsourcing to a Property Manager
- It Can Help You to Maintain Compliance With Landlord-Tenant Laws
When you become a landlord or decide to invest in another state, you’ll want to ensure that you’ve taken the time to brush up on landlord-tenant laws that pertain to you. Becoming a landlord for the first time comes with a list of tasks, duties, and responsibilities, many of which come with a long list of requirements and regulations that you’ll need to follow as well. These vary considerably from state to state. Hiring a property manager can help you to ensure that you maintain compliance with your policies and procedures. Property managers know the ins and outs of being a landlord as well as the tasks and responsibilities that are required of them. They can operate on your behalf to help you maintain compliance as a landlord.
- It Can Free Up Your Time
Being a landlord can be an all-consuming job, and if you have anything else on your plate, then you might start to find that you’re being stretched thin. As a landlord, you are responsible for providing your tenants with a habitable and safe living environment. As an investor, you are looking to be profitable and successful, which means that you will need to be sure that your property is maintained, repairs are made in a timely fashion, and rent is collected, all while following the rules and regulations laid out for you. Hiring a property manager can help relieve you of your duties and give you back some time to focus on other aspects of investing.
- It Makes It Easier to Invest Out of Town
Being an investor means being on the lookout for good properties in good housing markets. Often, investors find that there just aren’t very many good opportunities in their own hometown, which is why many turn to long-distance investing. Going out of town allows you to cast a wider search net, which increases your chance of finding a high-performing investment. If you’re thinking of investing in a property that’s in another town, then you’ll want to hire a locally-based property manager, someone who will be able to oversee the property for you, in person, who can be your eyes and ears when you’re not there.
Wondering how to invest out of state? Consider reading “Investing Outside Your Home City” for some important information to help make it a success.
- It Can Help You Price Your Rental Competitively
Competitive rental pricing is another important part of increasing your returns on your rental. Pricing a property too low can attract more tenants but also cost you in terms of profit. Pricing too high, on the other hand, can drive potential tenants away. The best solution is a compromise, finding that sweet spot that’s not too high or too low. A good property manager knows the area and the average rent prices, so they will have a pretty good idea about what you can reasonably charge for your rental.
- It Allows You to Outsource Maintenance and Repairs
If being a landlord isn’t a full-time job, then keeping up with the maintenance and repairs certainly is. There is never a shortage of maintenance and repairs to be done on a rental property, and keeping up with the constant demands can be tiring. An experienced property manager will have a number of professionals on call that they can reach out to right away when something goes wrong. They’ll also be experienced with inspections, maintenance, and repairs, and will know what needs to be done now to save time and money in the future.
- They Can Handle After-Hours Emergencies for You
Being a landlord requires you to be available for emergency situations, but it also requires you to set boundaries, treat your investment like a business, and remain professional. Often, it can be hard to balance all these requirements at once. Outsourcing to a property manager will be able to act as a buffer between you and the tenant’s emergencies. They’ll be able to field the tenant’s questions and concerns, only looping you in when it’s something relevant that requires your input. This means that when it comes to after-hours emergencies, you’re not going to be on call anymore, as long as it can wait until morning!
- They Can Find High-Quality Tenants
Finding qualified tenants will have a significant impact on your ability to turn a profit. So it’s important to make sure you have policies in place to screen applicants and ensure that only qualified candidates get through. A good property manager will already have screening procedures and policies in place and will be skilled at weeding through applications. They should also have screening policies in place that are in compliance with the Fair Housing Act and other important legislation, giving all applicants an equal chance.
- They May Be Able to Reduce Your Tenant Turnover Rates
In addition to finding high-quality tenants, a good property manager will be able to keep those tenants happier longer, which can go a long way toward helping you to reduce your tenant turnover rates. A property manager will be able to respond to tenant questions or concerns quickly and efficiently and won’t tire of being on-call to handle resident requests.
See how being an excellent landlord can help to reduce your tenant turnover rates.
- It Can Help to Reduce Your Vacancy Rates
In order to attract tenants, you need to know how and where to market your property. A property manager knows where to market and how to create a listing that will attract applicants. No need to spend time taking photos and writing up a listing. A property manager will make short work of this. See: more ways to reduce your tenant vacancy rates.
- They Can Help You to Maximize Your ROI
While some landlords worry that hiring a property manager will end up taking a significant bite out of their profits, often, a good property manager can help you to maximize your returns. Since you’ll be free from the day-to-day responsibilities that are involved with overseeing a rental, you’ll be able to focus on other, more high-level tasks, allowing you to make decisions that will move the needle and increase your returns. Often, experienced property managers will be able to lend you advice and support that can end up saving you money in the long run. For example, they might know the best contractors to use, those who do fair work and don’t overcharge, or they may be able to help speed up the process of tenant sourcing and screening, meaning you’ll have less downtime in between tenants. Often, their experience means that you’ll be saving money.
- It Gives You Peace of Mind
While investment properties can be an excellent investment and a great way to generate additional income, managing multiple properties and trying to balance everything can be stressful and overwhelming at times. This stress can only be amplified by adding more properties and responsibilities to your list. Hiring a property manager, though, can help give you peace of mind, knowing that your rentals are being managed professionally—without you having to be present for everything yourself. Peace of mind is not something you can put a price on, but by hiring the right people, you can get pretty close to having it.
Being a landlord can be time-consuming, but the good news is that property management is one job that can be easily outsourced altogether. By enlisting the help of an experienced property manager, you’ll be able to claim back your time and turn your rental properties into passive income. Not only can it help to make things easier, but as we’ve seen, it can help boost your returns as well. See for yourself how rental property can bring you financial freedom—and start growing your wealth today.
Are you looking to outsource your property management? Save time and ensure that your focus is on tasks that will grow your portfolio or make a difference to your bottom line. Learn more about hiring a property manager—and outsourcing all of your tasks as a landlord.
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