Hiring a property manager might seem a bit over the top if you’re a new landlord. After all, wouldn’t that basically mean you’re paying someone to do your job for you?
Not exactly.
While having just a handful of tenants may not have you running for help just yet, seasoned landlords know how quickly an extra pair of hands (not to mention eyes and ears) can become crucial when managing multiple properties.
What is a property manager?
Before we dive into the ins and outs of hiring a property manager, you may wonder what a PM is and how this pro can help with a landlord’s daily grind.
Property managers run the day-to-day operations of a rental property business. They create seamless processes for rent collection, fines, damages, and maintenance to help make renting out property easier.
Besides these routine management tasks, PMs can help with tenant screening and selection, bookkeeping, and even keeping property owners current on legal compliance.
To determine whether or not you should hire a PM, ask yourself the following questions:
1- Do you have the bandwidth to keep up with the daily demands of being a landlord?
A good landlord can meet resident needs promptly, including being available for communication, addressing maintenance and repairs, and maintaining well-organized financials.
2- Do you have the time to stay on top of changing real estate laws—since falling out of compliance could be a costly mistake for your business.
3- Are you are easily persuaded to say "yes" to tenants, rather than keep professional boundaries. Examples might include giving in to allowing a pet in the rental, when you know there are financial risks. Is it hard for you to be strict on rent collection and late fees? Many rental owners make more money when they have a professional whose responsibility is to get fair market rent value, enforce the terms of the lease, and remain unemotional during complaints and negotiations with tenants.
4- WHAT IS YOUR TIME WORTH?
A landlord should consider getting a property manager when the invested time management is causing a loss in opportunities at other places with substantial benefits.
In other words, is the time you spend managing your properties costing your business money or depriving you of pursuing other lucrative opportunities?
How much do property managers cost?
The good news is that having someone around to help your business run smoothly isn’t as costly as you might think. Generally, a PM company is set up to take their payment from the rents they collect before distributing the remaining money to the owner.
Standard costs usually include management fees: a flat fee, or a percentage of rents collected. Most management companies in our area have an initial set up fee, which often can be as much as $1500 or more (KFRE does not, however). Other fees you may have to pay a PM include the price of advertising and showing properties, vetting new residents, and releasing fees. Many companies (but not KFRE) surcharge maintenance costs; for example, add 7-10% to the invoice cost of an outside vendor.
HOW MUCH DOES KIM FINCH REAL ESTATE COST TO MANAGE YOUR PROPERTY?
We do not have an initial set-up fee. We charge 10% of gross rent. If you're not getting paid, neither are we. We advertise and personally show your property to interested parties, at our expense. We carefully screen prospective tenants. By thoroughly evaluating applicants, we avoid many potential problems during their tenancy. We charge a one-time fee of $250 when renters move-out and new renters move in. We take those late night or weekend maintenance requests. We do not surcharge outside vendor charges for maintenance or repairs. If we are charged, say $80 as an example, you are charge $80. Many of our vendors give us a discount because we give them so much business and we pass those discounts on to you. We communicate with you about maintenance requests and get approval before we proceed with requested repairs.
We ACH direct deposit your owner draw into the checking or savings account of your choice, usually around the 10th or 12th of each month.
In the rare event rent is paid late, we charge 10% of rent in late fees and split those late fees 50/50 with you.
OUR GOAL IS TO GIVE YOU GREAT SERVICE AND MAKE YOUR RENTAL PROPERTY SOURCE OF INCOME AS EASY AND SEAMLESS AS POSSIBLE FOR YOU. FINAL WORD.
Besides the convenience (and relatively low cost) of hiring a PM, one of the main reasons to consider working with one is the money you can save in the long run. The savings is especially evident when it comes to common landlord issues such as vacancies.
Vacancy is the biggest loss overall to a landlord. If it takes an owner two more weeks than a PM company to find a good resident for a property renting for $2,600 a month, it’s a loss of $1,300. And that’s more than half the cost to pay for professional management for an entire year.
CALL or contact DeAnne, our Rental Property Manager, to arrange our PM services for you. 801-228-8960 DeAnne@kimfinchrealestate.com
Comments