If you’ve been a property investor for some time now, you’ve probably been told by fellow investors that you need to hire a property management firm. There’s a good chance that you’ve considered saying “yes” to their suggestions, too. Not every investor has the time to manage the unit (and the tenants that come with it) themselves, so it would be great to be able to delegate some of those duties to a management agent.
The catch is that South Florida property management companies tend to be expensive, but there’s a perfectly reasonable explanation for that. In this article, we will share a few of the benefits of hiring a property manager so you will be able to decide whether it’s worth the cost. (Spoiler alert: it is.)
What is a property management company?
A property management company is a third-party contractor that manages the day-to-day operations of residential, commercial, or industrial rental real estate. Generally, a property management agent is tasked to see to the property’s repairs, upkeep, and the like. They may also be assigned to manage tenants in a residential rental, such as screening applicants, collecting rent, attending to complaints, and so on.
How much does professional property management cost?
The fees charged by a property management company are largely dependent on the scope of their services, as well as the market that they serve. On average, however, they charge ten percent of the total rent collected. In some cases, the property management company may also take a chunk off the tenant’s first rent in addition to their standard fee.
It’s worth mentioning that property management fees might be greater for short-term rentals such as Airbnbs. This is because managing a short-term rental takes more work than a long-term rental. For instance, if you’re renting out a beach house, your property manager should be able to find multiple short-term tenants to avoid vacancies. Screening multiple tenants a year is more time-consuming than screening only one tenant, which is why they charge a greater rate.
Do note that this does not apply to every investment property management company. Costs and services vary, which is why you should shop around to compare property management agents in your vicinity.
What does a property manager do?
If you’re not convinced of the value that a South Florida property manager brings to the table, you have to understand what it is that they do.
#1 Fill vacant units
One of the struggles of real estate investors is having to deal with tenant turnover. When a tenant moves out, you have to find a replacement tenant fast, otherwise, you’ll start to lose rental income. A property management agent not only oversees the tenant’s move-out but also advertises the property to potential tenants. They also take on the laborious task of conducting background checks, which involves contacting the tenant’s previous landlord, reviewing their credit score, and so on.
Furthermore, when you hire a South Florida property management agent, you benefit from a meticulous tenant screening process that follows the Fair Housing Act (FHA). That way, you can ensure that your tenant screening process complies with the law, so you don’t end up on the losing side of a lawsuit.
#2 Interact with tenants
As a real estate investor, you should consider your rental as a business and your tenants as customers. With that said, you have to provide customer service.
Property management entails interacting with tenants all the time. You start by onboarding your tenants, then you move on to collecting rent from your tenants, and sometimes, you’ll have to deal with evicting your tenants. If this seems too time-consuming for you, that’s where a property management firm comes in.
A property manager collects rent, schedules inspections, deals with complaints, and more. They’re trained to deal with all kinds of tenants – even the ones that want to have it their way. Property managers are always professional because they understand that how they treat your tenants is a reflection of your rental business.
#3 Conduct repairs and maintenance
Over time, your property will show signs of wear and tear (and in severe situations, damage) that you have to resolve. When that time comes, it can be helpful to have an investment manager by your side to secure third-party services at a competitive rate. This is because they’ve been in the industry for years and have already established a network of reputable vendors.
If there’s a problem, your tenants will be able to contact your management agent, who will then coordinate with third-party vendors to resolve the matter in no time. They no longer need to go through you, and in turn, you no longer need to be disturbed by your tenants’ endless demands.
In short, not only will your property management agent oversee maintenance and repairs, but they’ll also help you save a substantial amount of money.
#4 Keep records of everything
There’s a massive amount of paperwork involved in renting out a property. You need to document everything to have a smooth-sailing tax season and to protect yourself in case your tenant decides to sue. For instance, if an applicant claims that they were discriminated against during the screening process, you’ll be able to disprove it as long as you have the documents.
A property management company is tasked to maintain your bookkeeping records and to abide by various data privacy laws. They safeguard the data of your current and past tenants, and ensure that all parties’ information is protected at all times.
What else does a property manager do?
As we earlier mentioned, the services that a property management agent provides vary. Some firms offer the basics, while others offer the full spectrum of property management.
An example of the latter is Luxury Property Care, an expert property management company from South Florida. As a full-service property management company, we’re here to provide all of the services on this list – and more. That’s because we understand that no two properties are ever the same. Whatever your investment property’s needs are, we create a custom management plan that’s designed to meet your goals.