The Importance of Property Management in Real Estate
Did you know that having the right property manager can make or break in how well your property investment pays off?
Don’t underestimate the importance of property management in real estate. The right manager will take on the main responsibilities associated with rental properties, and make your life as a landlord much easier.
Let’s take a closer look…
What is a property manager?
Our property managers take on a range of tasks, including the following:
- Collecting rent
- Organising mortgage and utility payments
- Accounting Services
- Leasing and property marketing services – finding and screening potential tenants
- Organising security deposits
- Property inspections
- Scheduling repair and maintenance
- Tax reporting
- Communicating with tenants
- Handling legal matters such as notices and evictions
- Keeping a record of financial statements and preparing reports for the landlord
- Employee management for larger properties with staff members
- Maintaining positive tenant relations
Property managers can be especially useful when acting as the middleman between landlords and tenants in more complex situations like missing rent, breaches of contract(s), complaints, and evictions.
As you can see, the property manager is a jack-of-all-trades and takes on the property as though it were their own. The importance of property management in real estate is such that they take on these tasks so you don’t have to worry about them.
Choosing the right property manager
The right property manager for you will have the same outlook and goals as you.
The ultimate objective is to keep the occupant in the property, as constant turnover can mean financial loss. To keep tenants happy, you have to look after the property and nurture relations with them.
To find the right property manager, you need to keep a few things in mind:
- How long have they been in the property management business?
- How many properties do you need to be managed by them?
- Who will take responsibility for which aspects of the property?
- Will maintenance be handled by third parties?
- Will you make a profit from maintenance and repairs?
- What is the eviction process?
- Is there one point of contact?
- How will reporting work?
You should also consider the following factors when determining who should be your property manager:
- How close are they to your rental property?
- Are they located out of reach?
- Could they get to the property quickly in case of emergency or when a repair needs doing?
- Do they communicate well with you? This is absolutely crucial.
Pros and cons of having a property manager
When you’re working out the importance of property management in real estate, it helps to look at the pros and cons of having a property manager.
Aside from managing the property's more stressful or tedious daily operations, having a manager is a passive investment and can make for big returns.
Also, property management software, used by property managers, can help integrate financial and property management information into one portfolio.
Having access to property managers' insights can be invaluable in setting adequate rent prices. Most property managers have many clients, meaning they have better insights into current market conditions. That means you’ll get a good rental rate for your property compared to other similar properties.
The marketing services that property managers provide also help enormously. They can advertise for tenants in various media (newspaper, online, etc.) before doing property showings and carrying out credit checks on the tenant.
Having a property manager affords you the freedom to move around, to travel, to spend time with family and friends, and to invest in other properties, safe in the knowledge that a professional is handling your property well.
One of the downsides could be the cost. A percentage of the monthly rent goes to the property management fee (usually around 5% and 9% of the rent). If you struggle with cash flow, then this may impact your tenant turnover.
However, if you hire a manager who handles the property well, you should see great returns on your investment.
Having considered all of these factors, hopefully, the importance of property management in real estate is plain to see. If you need any further information or help with taking the next steps into property management, contact Thornley Grove today.