Whether or not to use a property management company can be a difficult choice for many property owners. Whether you’re a seasoned investor or brand new, weighing up whether to do it yourself or hire somebody else to do it is not always an easy decision. You might be asking yourself questions like “Are property management companies worth it? or “What do property management companies do?” We are rental property owners ourselves and we’ve both self-managed and hired others to do the property management, so we’ve seen it from all sides.
The main issues come down to whether you want to spend time or money to manage these properties, and if it’s money, are you getting enough back to justify spending the money? After all this time we do believe that for most people hiring someone to manage your rental property for you does make more sense, but to show you let’s cover everything property management companies do for you.
Property Management is essentially where a third party, licensed company, is responsible for overseeing and maintaining your property and its operations on your behalf. Some companies are more full-service with next to nothing for the owner to do, and others have some more involvement for the owners, so be sure to know what you’re looking for. Property management companies usually handle a wide variety of property types from long-term single-family rentals, to apartment buildings and even vacation rentals. Some companies are broad and cover everything, others are more focused and niched on what types of properties they manage.
If a property becomes vacant (which it eventually will or already is), then it’s the management companies responsibility to market the space, find a resident, qualify them and get them moved in and paying. During this process they might also be overseeing renovations, or fixing damages, or prepping the space so it looks the best it can to attract the best possible people.
Who should hire property management companies?
So who are some examples of property owners that might benefit the most from hiring a property management company?
- Individuals or families that own a single unit or a couple that don’t want to spend the time managing their properties or who can’t for various reasons (ex. working full-time jobs, travel a lot, busy schedules, etc.)
- Out-of-town owners who are not within close proximity of the property and/or who don’t frequently visit the area.
- Someone who owns several properties or plans to acquire multiple; the more properties you own the more time and energy managing them is required.
- Owners who don’t want to be an employer. Property Management companies are independent contractors, but if you hire someone yourself to oversee things, even part time, you now have to follow all the employment laws, rules and responsibilities.
- Owners who see their rental property purely as passive income or passive wealth building and who don’t want to ever have to manage their own property.
- Owners who don’t know have all the knowledge to manage their own property and would rather hire a professional to oversee everything.
- Owners who are looking to have their properties be in an affordable housing program. Often times these programs require extra legal steps and requirements and navigating them can be tricky.
What do property management companies do?
- Property managers will do the bookkeeping for your property and keep accurate accounting records
- Property Managers will intake any maintenance requests from residents and address the problem
- Property Managers will market and lease your vacant properties to qualified prospective residents
- Property Managers will collect rent from residents
- Property Managers will deal with any late paying residents and handle and legal matters that arise because of non payment
- Property Managers will stay up to date on local laws affecting your rental property and make sure you stay in compliance
- Property Managers will conduct property inspections to make sure the property is being properly taken care of.
- Property Managers will communicate lease renewals with current residents and keep good residents in your property at market rates
- Property Managers will pay invoices and bills on your behalf to make sure everything is getting paid that should be
- Property Managers will solve miscellaneous problems and issues that arise in connection to your rental property (new laws, new regulations, neighbor disputes, etc.)
- Property Managers will update you on market rents as they fluctuate
- Property Managers may advise on how to maximize your investment, through different strategies, although this should never be taken as financial or investment advice.
- Property Managers will provide you with monthly statements so you can review the performance of your property every month.
- Property Managers will conduct move-in and move-out inspections to make sure residents are paying for any damages that occurred during their stay
- Property Managers will oversee a resident's security deposit and make sure it is being handled as per legislation requires.
Collecting Rent
One of the most important aspects of a property manager's job is to collect rent from the residents. When you have a great resident in place and you have no issues with them the property can be very easy to manage and might not seem worth the cost to you. However, when residents were not properly qualified and rent stops getting paid on time or issues arise, that's when having an expert can really be invaluable.
Property Management companies make sure the leases they use are in legal compliance so there are no issues. They also make sure to spend time communicating with residents to help get them back on track. And if things get that far, they have attornies to help resolve any issues quickly and efficiently.
Property Maintenance
The real headache for owners usually comes in the form of dealing with maintenance issues. Even if you have a perfectly brand new house, there are going to be things that break, or problems residents are going to have. It could be as simple as someone got locked out, or it could be as bad as a burst pipe at 2 AM on a Saturday.
Nobody wants to be the one to receive that call on the weekend or at night, but property management companies do.
Property Managers will coordinate with a contractor or vendor and the resident to get the problem solved. Many times the problem is minor. The contractor will there in an hour and the resident is home to let them in and the problem is solved within 1-2 hours. However, other times there are many obstacles to overcome. For example, the contractor isn't available for days, parts are on back order, or the problem isn’t easily diagnosed. Maybe the resident is going away on vacation and doesn’t want anyone entering when they’re not home. Now the situation becomes a more complicated situation to manage.
Beyond that, property management companies will also help with regular maintenance and preventative maintenance. Things like:
- Pest Control
- Pressure Washing
- Lawn Care
- HVAC Filter changes
- Property Inspection Reports
- Fixing Appliances
- Plumbing issues
- HVAC issues
- And much much more!
Bookkeeping
Accounting and Bookkeeping is probably the least fun aspect of rental properties and property management, but is absolutely vital to having a successful rental property investment. Knowing how your property is performing and keeping a tight reign on the income and expenses can turn a good investment into a bad one very quickly. It’s also going to be extremely important come tax season to help maximize potential tax savings and keep more money in your pocket.
Tenant Screening
Thorough tenant screening is a property owner’s most important step in having a successful rental property. Residents who can afford their home, treat it well, and pay on time create the most successful rent property investments. This starts with doing as much work as possible upfront to find the most suitable residents. Typically, this is done by pulling credit reports, background checks, verifying employment and income sources, and getting references for a prospective resident’s former landlord or management company.
Resident Move-in and Move-out Inspections
A good property management company will do their own move inspection of the property but also have the new resident perform and sign their own inspection report. This is done so that if there are any items missed during the turnover they can be addressed quickly. More importantly, this is done so the condition of the unit is established when they move in.
If a resident moves out and the condition of the unit is significantly different, there is documentation to show this. Then the security deposit can cover the costs of these things. Knowing what can and cannot be covered in a security deposit is also another thing that is important. The deposit doesn't cover normal wear and tear, but can cover things like cleaning costs, damages, painting, patching holes, trashing out items left on the property, and more.
Benefits of Hiring a Professional Property Management Company
The responsibilities of a property management company are vast, but so too are the potential benefits. While it can be simple to manage your own property, experienced owners and investors know that having and experienced professional in your corner can make the process smoother and help maximize your investment. It also gives you back your time that you can use for other items like finding more high quality properties to invest in, or simply to spend that time with family and friends.
Here are five of the benefits you can have when working with a property manager:
- Lower maintenance costs - Property management companies have in house maintenance technicians and trusted 3rd party vendors that they know provide high quality work at fair or reduced prices. Even if the prices aren’t always much cheaper than others, the managers consistently do work with these vendors so you’ll never have someone taking your money and not doing the work, or doing a poor job.
- Reduced Vacancy - Property Managers are constantly leasing units and renewing rents, and have up to date local knowledge on what market rents and trends are. By knowing how to price your rental effectively you can reduce your days on market while also maximizing rental prices
- Higher Resident Retention - Your property costs you the most money when a resident leaves and you have no rent coming in and have to spend money to turn the unit. Property Managers have years of experience negotiating renewals to keep your rent high, while also keeping residents in place. Nobody stays forever, but a good property manager helps keep residents longer on average.
- Reduced Liability - Good property managers stay up to date with changing laws, rules, regulations and more. By staying up to date on the latest changes, especially for laws like Fair Housing Laws, they drastically minimize your potential liability and losses.
- Quality Residents - A successful rental property investment is predicated on placing high-quality residents who can afford their rental, want to stay, take good care of the place, and continue to pay. This starts by having a high standard and thorough screening process upfront so you can maximize your investment over the long run.
Why Hiring the Right Property Manager is Crucial
Every decision you make as a rental property owner has the potential to make you more money or cost you more money, in one form or fashion. Hiring a high-quality and experienced property management company is more expensive than cheaper property management companies or managing the property yourself, but can more than outweigh the potential costs and saved time.
At JAG Property Management, we know what it means to be a rental property owner, because we’re more than just managers, we’re owners too. We know what it means to own a rental property and experience those highs, the lows, and everything in between.
We’ve gone through the excitement of closing on a new property.
The anxiety of listing it for rent.
The excitement of rent coming in.
The disappointment when a resident leaves, and the excitement when it gets leased again.
Our focus is specific and niche because we are the best at what we do. We focus on long-term rentals for properties from single-family properties all the way up to 80+ unit apartment buildings. This includes properties like condos, townhomes, duplexes, quadplexes, etc. We manage properties in Orange County, South Seminole county, and Duval County.
Our team is ready and excited to make sure that we treat your property like another one of our properties and help you have the most successful experience you can possibly have.
If you own a rental property or properties in the Orlando or Jacksonville, FL areas and would like more information on the services we offer, feel free to reach out to us today and we’ll be happy to answer any of the questions that you have!
You can also check out our owner FAQ page or our Pricing page for more information!
