There’s more to being a landlord than simply owning properties. With many tasks to stay on top of when owning a property rental business—including tenant screening, rent collection, lease management, and maintenance requests—trying to manually keep track of everything can quickly become overwhelming.
One of your options to lighten the load is to hire a property management company.
A property management company acts as an independent contractor to whom you pay a monthly or annual fee for that company’s services. With a property management company, you don’t become anyone’s employer.
Here are some pros and cons of hiring a property management company.
A property management company consists of salaried staff as well as outside vendors who can complete any of the tasks your rental business may need. For example, a company most likely has team members who can screen tenants for you, get your leases signed, give apartment tours, etc. For tasks such as maintenance and cleaning, they may hire outside contractors.
Essentially, a property management company will provide you with a team of experts who can adequately complete any of your property manager duties. These duties can also extend to more complicated areas that you may not have much background in, including accounting, marketing, and law. With a property management company, you can rest assured that everything will be done correctly.
Typically, the tasks a property management company completes depend on your contract. You may prefer to handle certain responsibilities yourself and leave others for the property management company. Paying an outside company to take on certain tasks can save you tons of time and hassle on day-to-day operations you don’t want to deal with.
Another perk of property management companies is that they usually have insurance that can cover any potential liabilities.
In general, a property management company makes the most sense if you have a lot of properties to manage.
The biggest drawback of hiring a property management company is the high cost. According to Apartments.com, most property management companies cost between 8 and 12 percent of your monthly rent revenue. Oftentimes, a property’s type, size, price, and condition play into the cost you pay for services.
Furthermore, things can get even more expensive with additional charges. Many property management companies charge extra for certain services such as onboarding, evictions, or renewals.
Another con of hiring a property management company is that you can be far removed from your own business. If you care about being somewhat involved with your tenants and properties, then a property management company might not be the best option for you.
Property Management Software
If you’re hesitant about hiring a property management company for any of the reasons discussed above, you may want to consider using software for managing rental properties.
Property management software allows you to digitally manage most of the tasks a property management company would handle.
With tenant screening tools, you can have easy access to credit reports, eviction histories, and criminal records. Digital lease management reduces lease turnaround by days or even weeks, thanks to electronic signatures and reusable templates. Online rent collection makes it so you don’t have to lift a finger to receive rent payments. With maintenance management services, your tenants can easily submit maintenance tickets which you can begin addressing in-platform.
And with countless other features such as listing syndication, tenant communication, renter’s insurance, tenant credit reporting, and financial reporting, you can rest assured that your business will be in good hands.
Property management software is much more cost-effective than hiring a property management company. Some pricing models are feature-based, others are unit-based, and there are even some platforms that are entirely free.
Because property management software allows you to manage your tenants and properties on your own, you can be directly involved with your business without having to spend tons of time completing your landlord tasks manually. Basically, you can run your own business without having to do most of the legwork thanks to the high efficiency of property management software.
Hiring a property management company is a viable way to manage your rentals. By weighing the pros and cons of property management companies, you can decide if paying for one is the right choice for your business. It’s also important to consider software for landlords, which, in the age of the internet, has replaced many landlords’ needs for property management companies.
Read more interesting articles at Business Attract