Experienced and successful property investors will tell you that the number one factor for investment property success is location. Where you choose to buy your rental property sets an invisible ceiling on how much you can earn from the property. The neighborhood will drag down the value of the home or boost it.
It is possible to take a rundown home and make it profitable if it is in the right area. But it is hard to improve the best-looking home’s performance if it is in the wrong part of town. The right location is essential to rental property success, but after location, what is the next most crucial factor?
The second most important factor is how the property is managed. Management determines the property’s operational cost, overall attractiveness, the quality of tenants it attracts, and how long they stay. Successfully managing a rental property is a many-sided endeavor that is time-demanding and requires a landlord to have expertise in many different areas.
Many new property investors start thinking they have to self-manage their assets because they want to save costs. But when an investor does this, they are taking the short-term view to what is essential to their ultimate success as property investors. What should be more important to you as an investment property owner?
- Should it be saving a little money by not paying a property manager to look after your property?
- Or should it be making more money because the home is professionally-managed and can attract tenants who can pay more in rent?
- Or should it be making more money because the operational cost for the home is lower, and you can save money on tax deductions?
- Or should it be saving your time and dedicating it to ventures that let you grow your property portfolio and do other things you enjoy?
The approach you take to managing your rental determines how many properties you can own, what you earn from them, and how much time freedom you have. The best property manager can become an ally who relieves you of the burdens of managing a rental while improving the asset’s performance. The Upkeep Media Agency shares insights on what that manager can do for you:
Maintain a near-100% occupancy rate: The best property manager has vast experience marketing rental properties. They also have access to the right tools and networks to reduce the vacancy rates in the rental to zero or almost zero.
Install a watertight tenant-screening process: They know the techniques for investigating a tenant’s claim and unearthing their rental history. The manager will ensure that only the most qualified tenants get into the home.
Implement a seamless maintenance routine: Because they have experience with managing houses and a team of professionals at their disposal, they will limit or even eliminate incidents that interfere with the tenant’s enjoyment of the home.
Manage existing tenants effectively: The right property manager collects the rent efficiently. By imposing penalties for late payments, they ensure rents are paid. They know how to enforce the lease terms, navigate tenant relationships under the law, and manage evictions in a way that does not hurt the business.
Provide critical financial advice: The property manager is familiar with the small actions a landlord can take to reduce the cost of owning the asset while improving its income. The property manager will serve as your adviser on tax and accounting matters or direct you to the best professionals.
But how do you know when you have found the right property manager?
How to choose the best property manager
Choose a local company
A property manager who is located in the area understands renters and the rental market in the area. They know municipal regulations that affect the operation of rentals and have access to local trades-people.
Check the company’s reputation
Avoid new companies; they may not have experience or a bad company operating under a new name. Look them up on the state’s Real Estate Commission and Better Business Bureau.
Do they impress you?
If you are not impressed the first time you visit the company’s website or meet the property manager, you may be sure prospective tenants will not be.
Ask the following questions:
- How do they advertise vacancies?
- On average, how long does it take to fill a vacancy?
- What kind of properties do they have, and do those properties match yours?
- Can I see a sample tenant lease agreement?
- May I visit one of the houses you manage and speak with the tenants there?
Review the owner/property manager agreement
How much will they charge you? Who will be your primary contact person? How easy is it to terminate the agreement? How will repairs and maintenance be handled?
Finally, check their reviews and possibly get references from them. Repeat these processes with at least three property management companies before you choose one. Our team at RPM Vesta would love to answer your questions and show you how we’re the best in the area. Contact us today.
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