Whether you own rental properties on your own block or are investing out of state, it is important to recruit and use a professional third-party property management company.
Here are just five of the reasons you need it…
1. Generating Truly Passive Income
Rental property investing is frequently promoted as a way to generate passive income. It can be, however, taking the DIY approach to being a landlord rarely passive and profitable. You might get blessed and get a property with perfect existing tenants, who pay 12 month’s rent in advance and never have any issues with the property. That’s the rare exception.
To truly achieve passive income, you need to use a property management company who will handle all the daily management. Like bookkeeping, advertising, tenant screening, leasing paperwork, handling phone calls, scheduling contractors and fielding quotes, and regular inspections and maintenance. That does not include all of the extra work if tenants are struggling to pay on time.
To be truly passive, you want someone else handling it, and to just receive the check every month while your property goes up in value.
2. Privacy
Privacy is incredibly important. We don’t have much of it left these days. So, preserving whatever we can is more important than ever.
There are several ways to build in privacy as a real estate investor, including how you hold title. Still, if you break protocol and contact tenants in person, you’ll end up losing that privacy forever. It may not seem like a problem at first. Then you’ll start getting calls to your home and cell phone, and maybe even unhappy tenants showing up at your door at all times of the day and night with problems. You really don’t want that.
Using a property management company can help keep you anonymous.
3. Reducing Liability
It is a terrible shame at how litigious our society has become. Yet, it is the reality of the environment we live and invest in. There are countless professional criminals and opportunists out there who make their money and free rent by preying on other individuals, investors and business owners.
An experienced pro property management company can go a long way to helping you avoid running into these bad actors in the first place.
If they do sneak through or go bad, the last thing you want is personal interaction with them. Showing up to collect rent or inspect your property can result in numerous reasons for a frivolous or malicious lawsuit, even if you do nothing wrong. Then there are always personal safety concerns. Just don’t put yourself in that situation.
4. Great & Consistent Customer Service
Ultimately, real estate and rental property investing is a people business. You personally probably shy away from bad customer service experiences and gravitate to where you are treated well. Tenants are the same. You can either deliver consistently great service and get consistently great and exponentially increasing results, or the opposite.
To do well and get referrals, enjoy loyal, performing tenants who take care of your place you need to be instantly responsive to calls and emails, texts and repair requests and be able to do it in a friendly manner, even when you don’t feel like it. You also want eyes on the ground to watch and inspect your property regularly.
5. Compliance
Staying on top of landlord-tenant laws is a big full-time job. One wrong date on a notice can cost you everything.
Do the math and it is invariably cheaper and more profitable to use a great property management company. Especially when you add in the discounts on repairs and maintenance they can get you, and the ROI on your time.