As a real estate investor, one of the best ways that you can generate a steady income is by owning rental properties. If you’ve owned income property for any length of time, you know that managing a rental effectively can be financially rewarding. At the same time, you’ve also likely discovered that property management requires a large commitment of time and effort.
The obvious upside to owning rental property is passive income. With owning investment properties comes challenging obstacles that require time and extra money, if not managed effectively and efficiently. Failing to successfully navigate and manage difficult issues inherent to property management can stall growth opportunities and ultimately have a devastating impact on your property portfolio growth.
Here are 3 benefits a property management company can provide:
Keeping an eye on the details:
A good property management company ensures that each and every aspect of your day to day property management is covered. Managing leases and renewals are key functions, as well as handling maintenance issues. One of the key aspects in property management is to ensure that you set the right rental rates, a good property management company will conduct a thorough market study in order to set a rental price for your property. Ensuring that you achieve the perfect balance between maximizing monthly income and maintaining a low vacancy rate.
Experienced property managers are experts at finding good tenants, and will take care of all the details, including security checks, running credit reports, verifying employment, and collecting previous landlord references. Finding the right tenant match is means less turnover, less vacancy, and often, less wear-and-tear to the property, not to mention all the expenses of readying an empty unit for new occupation: changing locks, painting, small repairs, and more.
In addition, a good property management company will run preemptive maintenance checks, which can potentially save thousands in costly repairs. Plus, they often have preferential relationships with tradespeople, receiving quicker service and often better rates.
Maximizing the profitability of your time and money:
By having a property manager take care of the day-to-day aspects of running your income property, your free to spend your time identifying further investment opportunities. Most property managers charge a percentage of your property’s monthly rental rate in exchange for their services. The rate typically runs anywhere from 5-10%, which is generally less than the money you save by hiring a professional to take care of your property.
Increase the value of your investment:
A lot of property owners don’t necessarily think about their investment goal. Property management firms need to sit down and find out what the client’s intention is for the property. The property managers will then create a strategy around these objectives. This strategy includes everything that needs to be planned and allocated over time, including benchmarks for one year, five years, or even further into the investment. The right property management firm will not only take care of your property, they will also make sure your property value increases instead of the other way around
Hiring a reputable property management company with competent personnel can go a long way to making your life as an investor a lot easier. It is a great way to protect your investment and increase the value of it while at the same generating more income. To create an ideal scenario, property owners need to ensure that they deal with a property management company who is competent, trustworthy and a good fit for their property.
*According to Property Time, Fadi Nwilati is the CEO of Kaizen Asset Management Services, who are Property Managers for several commercial properties in the UAE in established commercial areas like Dubai Media City, JLT, DIFC and many more.