A lot of landlords manage their rental properties themselves. Usually, it’s to save money. Hey, we get it! A lot of property managers (not RES) are expensive, and many aren’t terribly competent.
Many of our property management clients used to manage their properties themselves, before hiring Real Estate Solutions.
Today, we’re going to give you the top 5 reasons they should have hired Real Estate Solutions for their property management needs from day 1 – and why every landlord should strongly consider hiring the professionals at RES.
In no particular order…
- Owning a rental property is a legal minefield. It’s not as simple as “Find a tenant, collect the rent.” If it were, property management wouldn’t exist. Here are just some of the legal issues that arise with owning a rental property. 1a: Discrimination lawsuits. Landlords can tend to be picky about who they put in their properties – and it certainly is wise to have criteria – but if you’re not consistent, and if you discriminate against tenants because they have kids, because they have a service animal or because of any other reasons, you could easily be sued for violations of the Fair Housing Act and the ADA (Americans with Disabilities Act.) 1b: Negligence. Many landlords defer maintenance, especially if the tenant doesn’t constantly hound them. The landlord may think they are getting away with saving those dollars, but those savings will come back to haunt them! If a tenant reports a loose railing leading to their entryway and the landlord doesn’t act, and someone falls and gets injured, we’ve now entered lawsuit territory. The same can apply to broken steps, electrical issues, heating/cooling issues and on and on. How and when to respond to maintenance issues often involves a very detailed analysis of what constitutes is “reasonable”, given the full set of facts. 1c: Security deposit disputes. Private landlords never have the fully systemized approach needed to make a “slam dunk” security deposit claim. Going into the property just prior to possession and documenting every square inch, documenting equipment, documenting the apparent age of wear items such as carpet and paint… these are par for the course with professionals. At move out, we seek out dirt or damage and document the move out condition. Anything we claim is 100% verifiable and provable in a court of law. We’ve been there and we know what the judges will be looking for. The traditional “walk through checklist” most landlords use, results in them being sued in small claims court for treble (read: triple) damages. That’s right, for every dollar claimed, landlords have to pay back $3 when they lose in court. These are just a small picture of the legal issues involved with managing rental property!
- You don’t actually save money by doing it yourself. This might be counter-intuitive, but lets first ask the basic question of “What’s your time worth?” Take your salary and break it down into an hourly rate. Now, include time-and-a-half, because most of the issues you deal with at your rental are going to be after normal business hours. So the first part of the equation is that you are spending your own time (which has a monetary value), but the second part if it is even more interesting… Professional property managers actually MAKE you more money. They know the rental market. They know how to dramatically reduce vacancy time (again, measured in dollars) by ensuring the property is marketed effectively, prospective tenants are responded to immediately, and the condition of the property is where it needs to be in order to attract quality tenants. Professional property managers handle turnover between tenants at lightning speed compared to DIY landlords. Our turnover times are measured in single digit days, vs. the weeks we often see involved when a landlord decides to handle the turnover work on their own. That’s REAL money! Property managers can save landlords many thousands of dollars simply by knowing -and working with – the best vendors in the business. Licensed and insured vendors who will stand behind their work and who charge low market pricing and vendors who truly value the business of the property manager (who represents many hundreds of properties), are always going to save the landlord money in the long run. Professional property managers know how to keep good tenants happy, and living in the property year after year. Last, property management fees are tax-deductible. When you factor all of this in, and include free tenant placement, every time the property manager finds your tenants, it’s remarkable how much you get for so little money out of pocket. Truly, hiring a professional is the smartest way to make the most money with your investment property.
3. It takes a village. With a professional property management team – like the one at Real Estate Solutions – you are not hiring 1 person to replace you as the DIY landlord. You’re hiring an enitre Team of professionals, all highly trained in all aspects of property management. If you want to go on vacation, and you’re a DIY landlord, guess what? You’re taking your rental property with you on vacation. When you outsource the management, you are free to live your life and let the money roll in. We handle the headaches, we handle the legal issues, we handle the evictions, the lease renewals, the maintenance, the neighbor complaints, on and on. When you have a Team of professionals in your corner, your tenants are happier. Happier tenants stay longer and take better care of the property – making you even more money on the reduced turnover and vacancy.
4. Systems, technology, and one-stop shopping. Professional property managers make all the documentation associated with owning a rental property conveniently accessible and easy to find and understand. Monthly statements of income and expenses, notifications of any maintenance underway, notification of lease renewals, constant feedback on the status of showings and marketing efforts and year-end statements and 1099’s. It’s all part of the service, and it allows the landlord to relax and check on their property as often or as infrequently as they would like. Take a vacation and enjoy the direct deposit of your rental funds into your bank account without any action needed from you.
5. Growing your portfolio. Everyone knows why rental properties can be great investments. It’s a large, expensive asset that goes up in value over time, while your tenants are simultaneously paying for your expenses. If you hired a professional property manager, and if you purchased a smart rental, your rental proceeds should cover the mortgage, HOA dues, taxes and the management fees. With a professional property manager as part of your Team, the next opportunity to buy a great rental property could be right around the corner. Property managers know when other landlords are selling their rental properties, before they are even listed. The property manager will know a LOT about the property, too! The property manager will have detailed maintenance history, will know what the property rents for and even what the neighbors and HOA are like. There is simply no substitue for having a professional property manager feeding you data on the best rentals to buy, the ones to avoid, and helping you grow your portfolio of investment properties.