By Joel Wanjiku
Many property owners lack the time and expertise to manage their properties. To this end, many end up hiring property third-party contractors to handle the various aspects of property management. However, professional property management is one of the most significant costs of owning property, leaving some property owners feeling shortchanged.
So, would hiring a property management company be worth the cost? Here is a brief overview of the costs versus benefits to help put your mind at ease.
What Does a Property Management Company Do?
Property management companies offer a wide range of services, including the following:
- Marketing vacant units to find tenants.
- Screening tenants.
- Drafting and renewing leasing agreements.
- Collecting rent.
- Property maintenance, such as cleaning and making repairs.
- Handling taxes and ensuring compliance with landlord-tenant laws.
Overall, property management companies provide active and continuous oversight of all operations. It is also worth noting that the services vary depending on various property types, and some companies offer customized services to suit unique property management needs.
The Costs of Hiring a Property Management Company
Property management fees are based on a percentage of all collected rent, usually between 5% and 10%. Notable, the fees vary depending on certain factors, including the number and size of units, the type of property, and the properties’ overall condition.
Additionally, they also charge extra fees for maintenance activities, such as landscaping. Overall, the fees may add up to considerable amounts, reducing property owners’ profit margins.
The Benefits of Hiring a Property Management Company
Hiring a property management company can save you time and money, boost your profit margins, and more. Here is an overview of the most valuable benefits:
· Reducing Vacancies
Property management companies advertise your properties with a sense of urgency and collaborate with real estate agents to find tenants. Overall, their resources make them more efficient at finding tenants than traditional landlords, filling vacancies quickly. Notably, vacancies reduce your rent income, so filling them translates to higher profits.
· Finding Good Tenants
Ideally, tenants should use property responsibly and pay rent on time. However, some tenants are problematic, causing many unnecessary complications. For example, irresponsible tenants can damage the property’s infrastructure and default on rent payments.
Fortunately, property management companies have experience dealing with tenants and know what to look for in a good tenant. To this end, they have strict requirements for screening tenants, ensuring that only reliable and responsible tenants occupy your properties.
· Reliable & Cost-Efficient Property Maintenance
Property maintenance requirements can be complex. Fortunately, property management companies provide daily oversight of the property’s conditions, ensuring that everything works properly. Moreover, they only hire the best property maintenance service vendors, such as plumbers, cleaners, and electricians, ensuring quality services.
Moreover, property management companies work closely with vendors providing property maintenance services. They provide them with a lot of work, enabling them to secure discounted prices. To this end, they can lower your property’s maintenance costs, saving you a small fortune in the long term.
· Mitigating Liabilities
Property maintenance is a legal obligation under most landlord-tenant laws. To this end, opportunistic tenants can take advantage of property maintenance negligence to make false accusations, causing legal liabilities and financial penalties. Moreover, neglecting property maintenance services can result in costly damages, compromising your property’s conditions.
Fortunately, property management companies handle all maintenance responsibilities, keeping the property in good condition. Additionally, they understand the local landlord-tenant laws, enabling them to handle opportunistic tenants.
· Convenience
Many property owners find property management requirements to be demanding and complex to handle. Fortunately, hiring a property management company absolves them of all responsibilities, saving them time and facilitating peace of mind. To this end, they can treat their properties as passive investments, freeing them to focus their time and energy on other things.
Is Hiring a Property Management Company Worth It?
Overall, hiring a property management company is worth the cost. Interestingly, the extra profits from filled vacancies and savings on property maintenance and liability mitigation can cover or even exceed the cost of property management. Moreover, the peace of mind you enjoy when working with a property management company is invaluable. Notably, you should only hire the best property management company to get maximum value for your money.
