When it comes to managing rental properties, it is easy to assume that this is one responsibility you will want to shoulder alone.
After all, managing a rental cannot be too difficult, can it?
When it comes to property management, though, the truth is that there are a lot of myths. From the widespread belief that property managers are costly, to the fear that no one can look after your property as well as you, there are plenty of reasons to assume that managing your own properties, is vastly preferable to outsourcing the job.
Ask anyone who has had first-hand experience with an excellent property management company, and you will find that they are more than willing to set the record straight.
With this in mind, let’s take a look at some of the most common misconceptions surrounding property management companies, and separate fact from fiction now.
PM Myth #1: Property Management Fees Add Up Quickly
It is important to note that a reputable property manager will only charge fees when the rental is occupied. This means that if your rental is vacant, then a management fee shouldn’t be do.
A good property manager may even be able to help you increase your net income – thanks to the fact that they are usually extremely familiar with the local rental market, and will have a good idea about the maximum competitive rate that it will rent it out for – which may be more than what you were charging yourself.
PM Myth #2: A Property Manager Won’t Look Out for My Home Like I Would
“They won’t look out for my property like I would,” is another common myth. But the fact is that a reputable property management company will, in fact, have a vested interest in your rental property’s success. Think about it. If you weren’t happy with the services provided, they would lose you as a client. No company wants that to happen. Naturally, they’ll look after your house in a way that’s satisfactory.
“Your property manager has a vested interest in you doing well,” explains Williams in his article, Why Hire A Property Management Company? “They’re in your corner because if you do well, THEY do well.”
PM Myth #3: They Won’t Screen Tenants as Thoroughly as I Do
A professional property manager will never go by gut feelings alone; instead, they will have strict screening criteria that they use to ensure that tenants are properly and consistently vetted – before they hand over the keys.
PM Myth #4: I Can Easily Do It Myself
While it’s true that you certainly can oversee your own rental, the fact is that the hours spent managing your property, will slowly but surely start to add up. This is especially the case if you already have another full-time job or live a considerable distance from your property.
If you find yourself feeling frustrated that this passive income is quickly turning into another job, consider turning this venture over to a professional property management company.
First, managing a property (or properties) is a full-time job. Let’s break it down and look at a few tasks you be responsible for including:
- Marketing vacancies
- Screening prospective tenants
- Collecting rent
- Repairs
- Routine maintenance
- Tenant issues
- Bookkeeping
- Reporting
Do you have time for even a fraction of the items on this list?
PM Myth #5: Involving a Property Manager Will Complicate Things
Enlisting the services of a property manager will not complicate things -in fact, they will simplify your life tremendously.
Another area where a property manager can help to simplify your life is when it comes to landlord-tenant law. There is an extensive amount of legislation -both federal and state that you must comply with as a landlord.
A professional property manager, though, will be well versed in landlord-tenant law -and able to operate on your behalf to help keep you in the clear legally.
PM Myth #6: I Will Lose Control Over My Rental
Hiring a property management company does not mean you are signing away your rights as a property owner; simply that you are outsourcing some of the work to someone else.
Experienced property management companies can often spot potential concerns before they turn into major issues -and know how to take action to mitigate those problems, preventing them from becoming worse. They can keep you informed of important developments with your property, involving you in the decision-making process. You will always have the final say.
PM Myth #7: I Cannot Afford It
The number one fear and one of the biggest property management myths is financial.
Investment property owners talk among themselves about everything. A common thread is the loss of revenue. They often claim it is the reason they do not hire a property manager.
The truth is avoiding property management to save money often has the opposite effect. If you are successful, they are successful.
PM Myth #7: I am Already a Maintenance Specialist
Skilled handymen (and handywomen) save themselves time and money. They also have the luxury, depending on the repair, to make repairs on their own schedule or wait until the next payday. Try telling a tenant they must wait for the repair on a drippy faucet, especially if they pay the water bill.
Another angle to consider is time. What is your time worth? In most cases, it makes more sense financially to hire a professional to manage maintenance and repair.
PM Myth #8: No One Loves My Property Like I Do
Certainly, you care for your property, after all, you have invested a significant chunk of time and money. Investors figure they are the only one who cares enough to do the job right.
Property managers are in the business of caring for and about their client’s investments. As we mentioned earlier, your success effects theirs. It also impacts their professional reputation.
PM Myth #9: I Will Lose My Service Relationships
When you work with a property manager you benefit from their extensive network of service providers and vendors. They have spent years cultivating relationships with a wide range of providers, which means they often have a repair person or vendor on-call.
The myth is that if you hire the company, you also hire their network. The truth is although a management company may prefer using certain people or companies, they do not force them on their clients.
If you already have providers you trust, continue using them. If something happens and a relationship does not work out, you can always circle back and ask your property manager for a referral.
PM Myth #10: They Work 9 to 5
This myth is partially true—property managers do not sit in their office 24/7. However, that does not mean their responsibility to you ends at 5:00 p.m.
Things like plumbing emergencies happen after midnight when normal people sleep. Property managers are like many other service providers. They have an emergency number tenants for things like furnaces going out or plumbing problems.
PM Myth #11: I will get income by doing absolutely nothing.
This business is not about passive income. It is not even the type of business associated with minimal effort on the part of landlords. On the contrary, it is a competitive and tough field requiring hard work and commitment. The daily routine of a landlord or property manager involves plenty of hard work and effort.
To become a successful landlord, you need to actively participate in renovating your rental properties to make them appealing for prospective renters.
PM Myth #12: I will not need anyone to assist me.
You will probably need some advice or networking with other professionals in the field. Property management is considered a full-time job, and doing it alone makes things even more difficult. Fortunately, there are various forums for landlords and property managers that unite professionals, allowing them to share experiences and ideas.
PM Myth #13: “I would like to “try” management myself, first.”
Unlike many investments, the ownership of rental property is governed by many laws and regulations. The federal government not only has tax regulations, but it also has fair housing, lead based paint and other onerous regulations that apply to rental property. The state may also impose more fair housing regulations as well as landlord-tenant laws and regulations to govern the relationship. Learning all these rules and applying them properly is very time consuming.
Keeping current with these various rules and regulations is onerous and not knowing items and procedures are required can be costly in the long run.
Are you still thinking to manage yourself?
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