When it comes to renting out ones property, the question must be asked whether it is worthwhile considering using a professional property management company to oversee the process, or to simply go it alone.
Ask different people the same question and the responses will vary from absolute horror stories as well as excellent anecdotes supporting either option. Making the decisionwhether to engage the services of a property management company or not requires thorough research and due diligence in order to be fully informed of the pros, cons andinherent risks.
Real estate investors
Property portfoliosize will affect the choice due to varying factors such as free time, focus, financial status, emotional investment and complexity of management. There is a vast difference between renting out the family home versus having multiple investment properties needing management.
For the investor that owns multiple properties, managing them effectively may become a full-time job due to the number of tasks and nuances required. Property management includes advertising, interviewing, sorting applications, checking references, property inspections, rent and debt collection and knowledge of tenancy and liability laws. For this reason, employing a professional that’s well versed in the day-to-day complexities involved is advised.
If the property to be leased is the family home, ones parents’ house or the only property one owns then there can be sentimental associations and emotional attachments that also influence the decision to engage property management. The emotional investment is on a different level than that of a strictly business minded decision regarding a property portfolio that is often more detached.
If it’s simply an investment then the pragmatic thing to do is let it be managed professionally.
Quality of management
As with any profession, there are varying degrees of competency and skill required that the right property manager should possess in abundance. The level of service delivered will depend upon the quality of the agent and how seriously they take their responsibilities. As a basis, an excellent property manager whose job it is to look after residential or office space NOHO should be experienced, proactive, engaged and committed to running a professional operation.
Check whether it is a small company that does a little property management on the side or whether it is their main expertise and source of income. How many properties do they manage and are there adequate numbers of staff employed to devote theattention your rentalrequires? What kinds of fees are involved and how much will this eat into any profits made from the investment?
The advantages of engaging a property management company
Property managers see many owners and tenants and their instincts can be honed more sharply when it comes to vetting prospective tenants. Most do credit and reference checks and some have access to a database of blacklisted or problem tenants. A private landlord may not know the right questions to ask to avoid problems down the track.
Management professionals are used to dealing with accounts and can be expert problem solvers if the need should arise. Letters, phone calls, belligerent tenants, debt defaulters, people who break lease conditions, property damage and the serving of eviction notices will all be dealt with on your behalf. This is the key advantage of payinga premium to a property manager to take care of day-to-day affairs and the occasional headaches that may occur.
In the long run, trying to save money by going at it alonemay end up costing more by leasing to the wrong tenant. As property is generally the most expensive assetthe average person owns, there is a lot at stake which makes the need to protect it all the more important.