Hiring a property management company can do a lot for both you and your rental property. For a flat rate each month, landlords can give up most of their worries about rental properties.
The property manager will handle rent collection, tenant screening, maintenance, yard work and landscaping … and any legal processes. The result? Reduced vacancy lengths, a higher quality of tenants,fewer legal problems, and more free time for you.
A property management company will take care of your rental property and save you time and stress, but did you know it could also allow you to raise your rent? The expert assistance of the best property management firms can add value to your holdings, which tenants will be willing to pay for.
Here are some of the ways that can happen.
Tenant screening brings in high-end renters
One potential result of a property managers’ diligent service is a higher quality of renter. Good property management companies will apply a detailed screening process to ensure you attract the most responsible renters.
The application process generally involves gathering enough info to run background and credit checks, and contact references. It may also involve an in-depth interview in which the tenant explains why he or she deserves the property and how the person will be able to keep up with payments.
Renters cannot take this screening process lightly. Those with lower incomes are inclined to avoid places that adopt such an intense process. Higher-end renters expect this, and are willing to pay a little extra to know that they’ll be living in a place that truly cares about the way renters treat it.
Renters pay for the cost of property managers
High-end renters are also more willing to pay extra if they know a property management company is maintaining the property. Property management companies provide quick service, strict attention to detail, and on-call expertise.
Most people understand those services don’t come cheap and they’re willing to pay a little more because they know that’s what they’re getting. If you advertise the fact that you use a property manager, a higher rent will be justifiable and the extra your tenants pay will likely cover the cost of the property managers.
Property managers monitor the market
You want to raise your rates to get the most profit out of your rental property. But if you raise them too high, it will scare away tenants.
A property manager can help you to keep your prices competitive but also advise you when it’s okay to raise the rent based on the current market. They compare pricing and other features so you don’t have to.
When the market takes a dive, they’ll let you know the best price you can list without losing renters; and when the market skyrockets, they’ll help you create the right justification for raising your rates when it’s time to renew the lease.
Landscaping adds value
Curb appeal is an invaluable feature for rental properties, especially if the owners don’t have to perform the upkeep themselves. In fact, the right landscaping can add as much as 28% to the value of your home.
That number goes even higher for rental properties that have a property management company handling the yard upkeep. Higher property values means you can charge more for the rental.
Quality maintenance costs more
Higher-end tenants like the ones you’ll be attracting when you use a property management company are aware that if they want quality service, they’ll have to pay for it. So they’re willing to do that.
If you were to maintain the rental property yourself, you may find it a challenge to get around to fixing the tenants’ leaky sink or cleaning the rain gutters. A property manager commits to be there and fix any problem at any time of the day.
The cost of property management pays for itself with increased rents. More often than not, there’s money left over for your profits. Management companies can help to minimize the actual cost of repairs, which makes it cheaper to perform certain maintenance than it would have been if you had done it yourself.
They already have the equipment and expertise to take care of most maintenance issues, which means you won’t need to buy new equipment. This saves you money that you get to keep as profit.
Stricter rent collection
Though this probably doesn’t help you to raise your profits, it does help you to secure them. Certain tenants will offer excuse after excuse for why their rent isn’t in on time, and with some investment properties, failure to receive rent payments in a time fashion is a real threat to retaining the investment.
Property managers are better at sticking to the terms in the rental agreement, whether or not the tenant had a hard week. They can make sure the money is collected every month, and with the higher expectations that come with property managers, tenants are far less likely to be late with their payments.
Property managers also help by ensuring that leases are renewed on time, which makes rent adjustments more reliable. On their own, property owners are more likely to make decisions on an emotional basis, and delay renewing the lease and raising the rent because they feel anxious about doing so.
Fewer legal problems is a valuable asset
Many property management companies keep legal counsel on retainer. These lawyers will help straighten out lease agreements and make it a safe and comfortable place for the tenants to live.
They protect both sides, which helps you. Most people don’t enjoy run-ins with the law, so they’re willing to pay for a property that won’t cause them any trouble.
Regular inspections are worth more
An essential part of keeping up with maintenance is administering regular inspections. This does not mean surprise inspections intended to expose the tenants’ poor cleaning habits.
Rather, these inspections help property managers to keep up on both interior and exterior maintenance. Essentially, such inspections help property managers to solve a potential problem before it has a chance to grow; for example, the property manager can fix a pipe before it bursts and ruins your tenants’valuable. Most tenants understand that such attention to detail is worth paying for.
Overall, the key to maximized profits is in the utilization of property managers. If you’re in the rental business in the Houston area and want to see your profits skyrocket, contact us today to learn what we can do for you!