Owning a rental property can be a rewarding experience, as most of the time, it generates a steady income. But a rental property only generates income when a landlord has great tenants who pay their rent on time and do not destroy their units.
Once a landlord encounters a problem tenant, owning and managing a rental property becomes hard and time-consuming. Using a professional property management company has a variety of benefits for landlords, especially those who have multiple properties. These benefits save landlords a drastic amount of time and money and make owning a rental property more rewarding.
One of the biggest benefits of using a property management firm is that the firm can handle all tenant screening activities. Some landlords do not run credit or background checks because they do not have the time or know where to get the reports.
Renting without regard for their criminal background and financial history is one sure way to end up with problem tenants. Property management companies manage the entire screening process so that landlords get tenants that pay on time and take better care of their units than those who were not screened.
Property management firms handle all of the legal aspects of dealing with tenants and maintaining a property. Landlord-tenant laws vary by state and municipality, so it is important that you know how to handle problem tenants and other rental issues correctly.
Property managers help handle evictions, property inspections, lease negotiations, lease terminations, and the collection of rent from tenants. In addition, they make sure that each property is in compliance with all property codes and safety laws. These services can help landlords avoid expensive lawsuits and legal issues.
Landlords need to collect rent on time each month to ensure that property taxes and other expenses are paid in time. On-time rent collection is also the only way for a landlord to generate reliable income. Unfortunately, some landlords do not control the rent collection process as well as they should. They listen to excuses from tenants and allow people to pay their rent late.
Sometimes, tenants use bad checks to pay their rent and the landlord is stuck with bank fees and other issues. Property managers control this entire process so that landlords do not have to deal with tenants who do not want to pay their rent as agreed. A property manager will contact a late-paying tenant until payment is received. If a tenant does not pay as agreed, a property manager can start the illegal eviction procedure.
Lease enforcement is another unpleasant part of being a landlord. The terms of a lease cover both the landlord and the tenant, but the landlord is the one who suffers if the tenant breaks his or her end of the deal. Property managers will take care of lease enforcement and deal with tenants who break the terms of their leases.
If a tenant is not allowed to have pets and someone reports that a pet is on the premises, the property manager will contact the tenant and demand that the pet be removed within a specific timeframe. If the tenant puts holes in the wall or makes other property modifications that were not discussed with the landlord, the property manager can make sure the tenant pays for repairs.
Making a profit as a landlord comes down to collecting rent consistently and knowing how to decrease the tax burden of owning a rental property. If a landlord does not claim the right number of deductions, he or she could face stiff penalties from local, state, or federal tax agencies.
Not claiming the correct number of deductions may also increase the amount of tax a landlord owes. A property management company can assist landlords determine which deductions to claim and help them get organized each tax season. This can help landlords save time and money, and it can also save them from having to pay fines and penalties for filing their taxes incorrectly.
A property management company can help shorten vacancy cycles, which cost a landlord money. Without a property manager, it may take a landlord several months to prepare a property for rent, figure out how much rent to charge, and market the property to potential tenants. Professional property managers can lower the amount of time it takes to perform these tasks.
After a tenant rents a property, a property management company can also enhance tenant retention. Once a landlord finds a fantastic tenant, he or she wants to maintain the tenant at the property as long as possible. Property managers can help make this happen by making repairs quickly and helping tenants whenever they have a problem. This improves the chances of a great tenant staying in the property.
Many of the benefits of working with a property management company are related directly to saving money. However, using a property management firm can also give landlords several personal benefits. The less a landlord has to deal with problem tenants, the less strain he or she will have.
Using a property management company also lowers the amount of time a landlord must devote making repairs, chasing down tenants for late rent payments, and enforcing the terms of a lease.
The most important personal benefit of working with a property management company is that it allows landlords greater freedom. Instead of being attached to one property, a landlord can purchase properties in multiple locations and let the property management company take care of each one.