Real Estate Management
Real estate management firms – making life easier
Real estate investment can happen for various reasons. You could invest in real estate because you need a house for yourself (that house of your dreams that you so badly want). You could use real estate as a means for supplementing your income either by buying at a lower price and selling at a higher price or by letting it out. Sometimes you might buy a property for the purpose of resale but might want to wait for a few years before you actually sell it. In such a case, again it would make sense to rent out the property and earn some money till you actually decide to sell it off.
Whatever the reason, letting out real estate demands real estate management and real estate management is not an easy job for everyone. In fact, a lot of people find it so much of a hassle that they prefer keeping their property vacant instead of letting it. Real estate management demands time, which you will rarely have. Real estate management is not just about finding tenants and collecting rent from them. Real estate management is also about ensuring that you do all the duties that a landlord/landlady is required to do. Real estate management is about verifying the credentials of the tenants before you actually let out your property to them. Real estate management is about ensuring that all the paper work is complete and correct i.e. the tenancy agreement etc are properly done. Real estate management also requires you to do repairs as and when required. Real estate management activities also include maintenance, painting, polishing etc of the house when the tenants move out and before the new tenants get in. So, really, real estate management is not that easy a job for someone who is in a full time job. However, there is a solution to this and that is hiring a real estate management firm to do all these activities on your behalf. Yes, this will mean that what you receive as an income by letting your property will be reduced (due to the commission/ fee charged by the real estate management firm). But that is just a small price for the convenience that a real estate management firm brings to you. However, it’s important that you choose the real estate management firm carefully. There are all kinds of real estate management firms out there (good and bad). You must check the references of the real estate management firm before you actually hire them for the job. A good real estate management firm will not only keep your property occupied at all times but will also ensure that you always receive the rent in time and without any hassle.
The Top 10 Reasons to Hire a Residential Property Management
Owning rental property can be an overwhelming experience for both new owners and longtime investment veterans. Fortunately, that's why help is available in the form of a professional pResidential Property Management company. But is this the right decision for you? Here are the top 10 reasons to consider why you should hire a residential property management company and how the benefits far outweigh the costs.
1) Rent Collection: A professional residential property management company ("PM's") have systems and strategies to improve rent collection and on-time rent payments. This allows you to ensure swift and consistent rent collection. Quick and consistent rent collection is absolutely critical in this real estate market where good cash flow can mean the difference between success and failure as a real estate investor.
2) Local Knowledge of Rental Rates: PM's have extensive local knowledge of rents and the ability to determine the highest rental rate possible for your property. With the internet and the ability to do large scale searches for rental properties, potential tenants know if your property is overpriced, even by $25. Overpriced properties sit empty while other properties get rented. Knowledge of rental rates is a key factor to fast rentals and quick cash flow.
3) Tenant Screening: A PM requires a detailed written application from each adult with photo identification. Additionally, PM's will run criminal, social security and public notice (bankruptcy or judgments) searches to determine if the application is accurate. PM's will also call past and present employers, landlords and other references. PM's have set requirements and standards for accepting or declining an applicant and thereby ensuring you comply with fair housing rules and other local and state regulations.
4) Marketing Expertise: PM's have years of experience in how to best market your properties so they are rented in the quickest time possible. PM's use both offline and online marketing to maximize your properties' exposure and find qualified tenants quicker. Most PM's utilizes 10, 20 or even 30 different techniques to rent a property quickly which reduces your carrying cost of a vacant property.
5) Property Law and Regulations: PM's have extensive and up-to-date knowledge of property laws and regulations and will assist you in making sure you are in compliance with your local, state and federal rules and regulations. These rules and regulations include complying with fair housing regulations, the Americans with Disabilities Act and other applicable local, state and federal laws. Avoiding one law suit will more than pay for any PM's fees many times over.
6) Tested and Reliable Professionals: residential property management company's will already have vetted numerous vendors, suppliers and contractors to make sure they provided good quality work at reasonable prices. Failure to properly vet these professionals can be a costly mistake. Many Owners overlook this function because they do not know how to do it or because it is a time consuming and laborious process.
7) Inspection Reports: The PM should make he does inspection before and after each new tenant. Additionally, most PM's will perform routine property inspections at least every 180 days. Your PM should be responsible for preparing frequent written inspection reports for each of your properties. Faults in your property that are found quickly can be resolved before they become expensive items of disrepair.
8) Financial Records and Security Deposit Escrows: PM's will provide detailed income and expenses reports as well as cash statements every month saving you the bookkeeping headache. Additionally, PM's will also manage your security deposit escrow funds and make sure you are in compliance with local and state regulations. PM's will provide end-of-year tax reports for your accountant or financial advisor.
9) Emergency Calls and Shield You From Tenants: A residential property management company will shield you from emergency maintenance calls and tenant headaches. Just imagine have your time to yourself and not have to deal with tenants and all there headaches like "my toilet is overflowing" calls.
10) Low Costs: A PM should only be charging around 6% to 10% of the monthly rent collected. Assuming a monthly rental rate of $1200 per month that is a fee of $72 to $120 per month. This is less than $4 per day! Can you possible do all these things for less than $4 per day?
11) Bonus Reason! FREE TIME: A good residential property management company will free up your time for doing deals that make money. I mean serious money as opposed to dealing with non-money producing activities like tenant and property management.
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Mike Lautensack is the owner of MVL Property Management, LLC ( http://www.montcopropertymanagers.com/ ) based in and around Philadelphia, PA. He advises real estate investors how to build wealth and financial security through hassle-free ownership of investment real estate with their "Total Property Management Program." This proven management system allows owners to enjoy the financial benefits of cash flow, tax savings, and wealth creation while it GUARANTEES you will never receive a late night emergency call, deal with a lengthy eviction proceeding or ever have to interact with an irate tenant.
The Benefits of a Residential Property Management When Things Go Wrong
A residential property management firm can be invaluable to a property owner. This is largely because a property owner often has a vision of watching their real estate investment grow, with a solid rental fee coming in and with a big profit waiting once the property value has escalated over time. What the property owner is almost never prepared to handle is the little clause in their rental agreement with their tenants that requires repairs, replacements and immediate assistance for home repair issues. Waiting to get multiple quotes for repairs of your own residence is one thing. Acquiring timely quotes and actual repairs for a tenant is an entirely different one with potentially significant legal ramifications.
Even minor repairs can become major problems, such as a drain that backs up and warps a floor or a deck with splintering boards that someone has fallen through. An experienced residential property management company will have the right contractors just a phone call away- something that will be essential when working with a contractual obligation to provide safe living standards. Some of the greatest difficulties in working with contractors include finding ones that are reliable as well as finding contractors who bid a fair price.
A real estate investor is typically not as familiar as a residential property manager would be when it comes to market prices for particular repairs. A residential property manager would also be more likely to have an understanding of the processes required for a repair to ensure it is solid and that you are getting your money's worth. It is important that you have the skills and knowledge to make repairs before they become a big problem and can save money by doing little repairs versus big repairs later. For example, a professional property manager would be able to gauge whether a few bathroom tiles needed to be replaced or whether the drywall was actually the source of the damage and a more extensive repair would eliminate the potential for issues such as mold.
A property owner should seriously consider the skill set a professional property manager can bring to the table in order to ensure the real estate investment is adequately handled. It will only take one preventable repair issue or botched contractor job to make it clear the added knowledge and skills of a property manager would have benefitted the overall real estate investment.
Once you buy a real estate investment you need to protect your investment and yourself against people who may want to take things from you. A professional property manager can provide that protection by know the laws and having experience that can save you a lot money if things go wrong.
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Mike Lautensack is the owner of full service Residential Property Management company based in and around Philadelphia, PA. His "No-Hassle Property Management Program System" allows owners to enjoy the financial benefits of cash flow and tax savings and GUARANTEES you will never have to interact with an irate tenant. For more information please go to http://www.delvalproperty.com/
