Property Investors are often concerned with buying a property because they are far away from their asset. This should not be the reason for not investing in a good opportunity. Managing agents are there for just this reason, to make your life easier, to manage your property and to keep a general eye on it.
Often owners of 1 or 2 properties argue that the money the managing agents charges every month is not worth it.
We will give you 5 reasons why you need property management company.
1. Your property management company will save you money in the long run.
The 7-10% that your managing agent will ask will be small compared to the amount they will save you in the long run. By hiring a good property managing agent you will not have to worry about rental income, damages and repairs. Property management companies are there just for that, to safe your sanity and allowing you to spend your time in a far more enjoyable way.
Property managers will find better tenants that will stay longer, in so doing taking better care of your property and limiting the unoccupied months.
2. Property Management companies will save your sanity
You should consider how much time it will take you to deal with
- late payments
- preparing the property for new tenants
- finding new tenants and dealing with bad tenants.
This in its own can be a full time job.
Consider if you charged for your property management hours on your hourly rate, the 7-10% your agent will charge will look like small change.
By hiring a property managing company you will be able to simply continue with your daily life, you wouldn’t have to worry about the day to day running’s of your property. This will not only save your sanity, but make the 7-10% fee worth it. If you feel that this may all sound like a sale technique, then I urge you to keep track of your hours for the first 6 months. I promise you the hours to managing your property like a business and not a hobby will far exceed your expectations.
3. Better Tenants
Property Managing companies simple have far better resources than you regarding tenant screening. They know what to check, to sort out between the valuable tenants and the unworthy tenants. A good property managing company will screen through them all, checking they credit ratings, their previous property complaints and much more.
They will also have a bigger pool of tenants to choose from, chances are that they already have a waiting list of potential renters. Meaning better quality tenants faster. Fundamentally this means keeping your rental property profitable with fewer empty months of waiting for a good tenants.
4. Property Managers know the law
This is something no property owner wants to deal with. The law is messy and ugly, you can easily find yourself in the wrong if you have a slightly smart tenant. One of the main purposes of a property managing company is to make sure you as owner is always in the clear. A good managing agent will know the law far better than you, they will know how to screen without it becoming some sort of discrimination case. In the case that an eviction, they will know how to go about to do it fairly and legally.
This is something that can’t be more exaggerated, especially in South Africa. Our county is very harsh on owners that commit unlawful evictions. You should make sure that you are always on the right side of the law, your property managing agent will do that for you.
This is of course in the worst case scenario, but your rental property will still have to have a Lease Agreement, Rental Move In Checklist that you actually filled in extensively with the visual documentation. It is these kinds of extras that suddenly turns your easy passive rental income into a full time job. You should honestly ask yourself if a property management company isn’t worth their salt.
5. Property Managers are the buffer between you and the tenant.
It must be remembered that investment properties are exactly that, investments to make money. By getting to close to your tenants as an owner you may become too reluctant to deal with problems on the spot, or you may find yourself frustrated with your tenant.
Property managing companies are there to prevent this, to make sure that the level of professionalism is always kept. Issues that may arise are dealt with in a effective, efficient, professional level, the way a business should be run.
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