While owning a rental property can be a great source of steady cash flow, the management that goes along with it can really drain the time and energy of a real estate investor. While it might make sense for you to manage your own property if you are local, handy with repairs, and have the time; there are still many benefits to a good property management group.
We’ve broken down the top 3 reasons why hiring a property manager might just be the thing that allows you to take your investment business to the next level!
Tenants, Tenants, Tenants
The first reason hiring a property manager would benefit any real estate investor is their experience with finding and managing tenants. It can be difficult to find good tenants and even more so to manage them effectively without getting too attached. An experienced property management group will be instrumental in the process of recruiting and maintaining good tenants. Knowing where to find good tenants and then following through on background checks, credit checks, employment checks, etc. can take up a lot of time and sometimes be risky if you don’t know what to look out for. While the process’ front end could benefit from an experienced professional, there are also many complications that could arise from managing rentals.
Property management groups not only can find you a good tenant but will follow up with them about payments, routine maintenance, potential tenant conflicts, and emergency repairs. Sometimes forming a personal relationship with the person who is renting from you, might negatively affect your ability to manage the property effectively, so putting some space between you and your tenants is not a bad idea. This is a business after all. Overall, outsourcing the management of your renters can offer investors a tremendous amount of peace of mind.
Compliance with Property Laws and Housing Regulations
When managing a rental property, there are countless local, state, and federal regulations that are important to keep up with and be aware of. A good property management group will be well versed in these regulations and make sure to keep the property in compliance, to avoid any potential negative consequences. Additionally, there are regulations regarding fair housing practices that apply to screening and choosing tenants. Without being familiar with regulations around potential housing discrimination, you might find yourself with a costly lawsuit and/or a disgruntled tenant. A good property manager will be fully aware and familiar with these laws and regulations and will be able to guide you more effectively through these processes.
Maximizing your Business Potential
The last, and maybe most important reason why hiring a property management group could be beneficial, is the support it offers to focus on growing your business and maximizing your potential. If you are spending all your time running your income property and managing tenants, it makes it difficult to find the next deal to keep your business moving. The time you save on these tasks could make all the difference when it comes to growing your business.
Additionally, property management groups can help you set competitive rental rates. This way, you don’t miss out on extra income because you don’t know the appropriate rate to charge or vice versa you avoid overcharging and leaving your property vacant for a period. Property management groups can help you find the perfect balance between maximizing your potential income while also avoiding high vacancy rates.
And finally, hiring a property management group can allow you to expand your business out of state (or country!). While most investors focus on a radius around their primary residence, having professional management of your properties means you can rest easy knowing that even your geographically distant investments are well-managed. This can greatly expand the potential of your business by removing any barriers to going after deals in any location.
Overall, we have many clients at CPL who manage their own properties and have had success! But there are also undeniable benefits to hiring an experienced property management group, as you read above. The potential to save time and energy and refocus that on your business is limitless and can really take your investment portfolio to the next level.
If you have any questions about managing your rental properties or finding good properties to rent out, don’t hesitate to reach out to the team at CPL! We are here and ready to serve you. While we do focus on the lending side of REI, we also do our best to offer guidance on how to best manage your portfolio and meet your goals, whatever they may be. So reach out today to see how CPL can help you take your investments to the next level!