There’s a lot more to being a landlord than simply owning rental properties.
As a landlord, you have a number of tasks to stay on top of, including rent collection, tenant screening, lease signing, and maintenance.
One option you have is to hire a property management company. A property management company is an independent contractor you pay a monthly or annual rate to complete all of your property manager duties.
But should you hire a property management company? Keep reading this article to learn if hiring a property management company is right for you.
Why Property Management Companies Can Be a Good Idea
Property management companies are reliable, and if you hire one, you can rest assured that your properties will be in good hands. This is because property management companies have a team of experts, both salaried staff and outside vendors, who specialize in a particular area.
For example, a property management company contains staff who knows how to market a property, host showings, screen tenants, make repairs, handle accounting, and more. Instead of trying to understand each of these components of property management yourself, you can rest easy knowing everything will be done correctly and thoroughly with a property management company.
Downsides of Property Management Companies
The biggest negative of contracting a property management company is the high cost. According to a study by Apartments.com, landlords who hire property management companies spend an average of 8 to 12 percent of their monthly rental income on them.
Furthermore, many companies charge additional fees for onboarding, tenant placement, evictions, renewals, and extra services. If you decide to hire a property manager, negotiate carefully and decide ahead of time which duties you want to contract out.
Another downside of hiring a property management company is that you become removed from your tenants and properties. This isn’t a concern for every landlord, but if you do want to remain involved, then a property management company probably isn’t a good option for you.
Hiring a property management company makes sense if you own several properties, especially if you don’t live near them and are comfortable with someone else running your business.
Another Option: Property Management Software
If you aren’t sold on hiring a property management company, the good news is there’s another option at your disposal: software for landlords.
Property management software has been a game changer for landlords over the past decade because it allows you to manage your rentals without having to spend time on all the tedious or difficult tasks.
Here are some of the ways property management software facilitates your landlord responsibilities:
- Online Rent Collection – Collect rent digitally using credit cards, debit cards, or ACH payments. This makes things so much easier for you and your tenants and reduces the likelihood of missed payments.
- Tenant Screening – Software provides you with all the tools you need for thorough tenant screening, including credit reports, criminal record reports, eviction history checks, and online rental applications.
- Maintenance – Tenants can submit maintenance requests in-platform accompanied by pictures and descriptions of the problem. Once notified, you can immediately start acting on fixing the issue by contacting the necessary vendor or personnel.
- Lease Signing – Signing leases electronically saves paper, time, and headaches.
- Renters insurance – You can get your tenants signed up for renters insurance directly from the platform.
Using software for managing rental properties is also a much more affordable option than hiring a property management company. According to Capterra, most platforms cost landlords between $1,000 and $5,000 per year. Prices vary from platform to platform, with some opting to charge by the number of units you manage while others charge for the features you want to use. There are even some platforms that are completely free for landlords to use.
Property management companies offer an experienced staff who can take care of some or all of your landlord duties, and you may decide that they’re worth the cost for your business.
In many cases, however, property management software is the more appealing option thanks to its affordability and easy-to-use interface that allows you to remain invested in your business without ever feeling overwhelmed by your responsibilities.