A professional property manager can be a game-changer for rental real estate property owners, as they can protect your investment property by choosing trustworthy, reliable, and thoroughly vetted tenants. They can also oversee the physical maintenance of your property.
Hiring a rental manager for your real estate investment assets can be particularly helpful for minimizing eviction risks.
As the U.S. Government Accountability Office (GAO) points out, millions of renters get evicted each year. It also cited a Princeton University study, which found the U.S. eviction rate in 2018 to have been at 7.8 evictions per 100 renting households.
As an investment property owner and landlord, you should aim to prevent and reduce costly, time-consuming evictions, a goal that an expert property manager can help you achieve.
What Does a Professional Property Manager Do?
Property managers serve as the everyday liaison between property owners or landlords and tenants. They can be individual managers or an entire full-service property-management firm.
Professional property managers have many tasks and responsibilities, which usually include:
- Property marketing
- Resident screening
- Leasing services
- Rent collection
- Property inspection and maintenance
- Accounting and financial reporting
- Legal and compliant evictions
Reputable firms even offer free rental analyses, according to this page on Charlotte property management solutions. With this free rental property assessment, you can determine whether you're charging enough for your property (or how much to charge to stay fair yet profitable).
Is It Mandatory for Landlords to Hire Property Managers?
No federal or state law mandates landlords to enlist the services of professional property managers. As a rental real estate property investor, it's completely up to you to be hands-on and act as a self-managing landlord.
If you decide to go with this route, however, know that you'll have a lot on your plate; you'll be responsible for all the operational, financial, and legal aspects of owning and running a real estate rental business.
How Can an Expert Property Manager Be a Game-Changer for Investors?
For many Americans, real estate is the best investment. The latest annual Gallup survey found that, for the 12th consecutive year, real estate remains the top investment choice (37% of polled U.S. participants).
Many investors, particularly newcomers to the market, mistakenly believe that real estate investments provide passive income. The Internal Revenue Service classifies it as such, but from an operational perspective, it can be active (e.g., self-managing landlords).
With the help of a professional property manager or management firm, however, you can transform your real estate investment into a venture that leans more toward being a passive income generator.
Finding Reliable Tenants
Securing reliable tenants is one of the most tedious and time-consuming tasks that self-managing landlords face. The process starts with property analysis, which allows landlords to decide their rental price range.
Determining rental prices is critical to finding reliable tenants, as this allows you to be more accurate with your marketing efforts. You can direct online and offline ads and listings toward the correct audience or tenant pool.
After accurate marketing comes thorough tenant screening, which often involves:
- Conducting criminal background checks
- Checking credit scores and employment statuses
- Reviewing rental and eviction histories
All those steps take time and effort, and you must perform all of them "equally" with each applicant. You can't conduct all on one and then only perform a credit check on another. If you commit this mistake, you may find yourself in legal trouble and face a discriminatory charge.
If you don't have enough time to find and screen tenants thoroughly, partner with a property manager whose primary job is to find highly qualified renters to move into their customers' rental properties.
Overseeing Property Maintenance
Another way a property manager can protect and even maximize your property's profitability is by taking proactive and preemptive steps to maintain and care for your property. They'll keep your property in top shape through regular inspections and timely repair and upkeep services.
Your property manager can also help you increase your potential profitability by making expert suggestions regarding value-adding upgrades and additions. They may, for instance, recommend high-ROI updates, such as energy-efficient appliance upgrades or kitchen modernization.
Ensuring Legal Compliance
A professional property manager can help you and your rental business stay in compliance with all local, state, and federal laws. They can do so by:
- Ensuring fair and non-discriminatory tenant screening and selection policies
- Proactive management of leases
- Conducting routine safety and habitability inspections
- Staying up-to-date with regulatory changes in tenant-landlord laws
With an experienced, full-service property manager, you can also rest assured that they'll handle evictions on your behalf. They'll perform all necessary steps in the process, starting with the preparation, signing, and serving of the legally required eviction notices.
Frequently Asked Questions
How Do Property Managers Get Paid?
If you decide to hire a professional property manager, you'll likely have to pay them a pre-agreed percentage of your monthly rental fee. Investopedia says this can be anywhere from 8% to 12% of monthly rent fees.
If, for instance, you charge $1,000 a month for the rental property, your manager will take $80 to $120 as their payment.
Some property managers also charge a one-time fee for certain services, such as leasing-only. In this scenario, the manager or firm may charge a percentage (up to 100%) of the first monthly rental fee upon successful leasing.
Leasing-only services often include marketing, tenant screening, lease drafting, and move-in coordination. Once the manager has successfully moved your tenant in, their services will also conclude.
When Should You Consider Hiring a Professional Property Manager?
If you want to own real estate investment assets but don't want ongoing, active involvement in their revenue/profit generation, consider hiring a professional property manager.
With a manager, you won't have to worry about numerous tasks and responsibilities. You can, however, still earn near-passive rental income.
Up Your Investment Game With the Help of a Property Manager
Hiring a property manager can be a game-changer for investors, as they can help protect your assets and income through accurate marketing, thorough tenant screening, and legal compliance. With them working on your behalf, you can be closer to earning passive income.
If you're looking for more informative content and related reads like this, browse our other recent guides and articles.
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