1. High-quality tenants
Tenant screening can be a complex process, and if you don’t have sufficient experience in the real estate industry, you might end up choosing a bad tenant. The main problem with bad tenants is that it can be quite difficult to make them leave your property. Good property management companies have a reliable and verified screening process that helps them select tenants who will:
- Rent long-term
- Pay rent on time
- Minimise the wear and tear of the property
- Cause fewer problems
A property management company that has been in the business for a long time, has seen thousands of tenant applications. This will help them dig into facts about the potential tenants quicker and identify red flags. If you allow a management company to handle the tenant screening, you are also avoiding rental scams that are directed at property owners.
Additionally, you also ensure that you won’t have to deal with time-consuming discrimination lawsuits. Avoiding bad tenants, lawsuits, and scams is by far one of the main benefits that come with hiring a professional property manager.
2. Less legal problems
Experienced landlords are aware of the fact that a single bad tenant can cause a great deal of financial and legal headaches. A high-quality property management company is armed with a lot of knowledge and they can protect you from potential lawsuits and vulnerabilities. Each Australian state will have their own laws that can affect a landlord. Additionally, you also have the federal law that will cover the following aspects:
- Screening tenants
- Property conditions and safety
- Tenant evictions
- Unit inspections
- Signing and terminating leases
- Collecting and handling rent and security deposits
If you avoid one lawsuit by hiring a specialist, the money that you save will be more than sufficient to pay the property management company’s fees, and you will also avoid wasting your time and energy.
3. Shorter periods of vacancy
A professional property manager will help you handle the following tasks that prevent your properties from staying vacant for too long:
- Prepare the properties for rent – A property management company will know exactly what cosmetic improvements must be done to the units in order to maximise your revenue.
- Determine the optimal rent rate – Setting the rent too high and it might take too long to find tenants, too low and you might be losing money every month. It is crucial to determine the right price and doing it requires knowledge of the local real estate market, data on similar units, and access to professional rental rate tools.
Marketing your property effectively – Skilled property managers have written numerous ads throughout their career and know what to say and where to advertise to get many candidates quickly. Because they handle many properties, they can probably negotiate cheaper rates for the ads both online and offline. Furthermore, they are familiar with sales and know how to close when they field calls from prospects and take them on showings and work with home rental companies and agencies.
4. Long-term tenants
If tenants don’t rent your units for long periods of time, you will have to deal with a series of issues like lost rent, having to clean the property, change the locks, repaint walls, replace carpets, make small repairs, go through the tenant screening process and marketing campaigns again. These things take time and can be quite expensive, but can be avoided by keeping your tenants happy.
A good property manager will have a tenant retention policy that is time-tested. These programs are essential and require a systematic and consistent approach, which is where a high-quality property management company will shine. A happy tenant is more likely to rent long-term than one who is not happy with the property or with the landlord.
5. More efficient rent collection
Handling the collection of rent and late fees is an extremely important aspect of property management. To ensure consistent and reliable cash flow, rent must be collected on time every month, and it’s important that tenants understand that.
By hiring a professional property manager, the landlord puts a buffer between themselves and tenants, allowing them to be the bad cop who has to listen to tenants’ excuses, collect rent, and handle evictions if necessary.
Being too permissive, tenants may, walk over you. It should be made clear how important each clause in the lease is and if breach it there can be consequences.
The eviction process is another important aspect that a property manager will handle. There are strict laws that regulate this process and doing it the wrong way can be a big mistake. A skilled professional knows the law and aims at making the best out of bad situations. Not having to handle a potential eviction yourself is a very compelling reason to hire a specialist.
6. Lower repair and maintenance costs
Tenants are always happy if you offer them good maintenance, not to mention that by doing that you also preserve the value of your assets. By hiring a property manager you gain access to professional maintenance and a network of licensed, insured, and bonded contractors. These contractors are trustworthy and have been vetted for quality work and good pricing. This can save you a lot of money compared to hiring someone from the yellow pages.
Additionally, a property management company will also be able to get discounts on account of their great volume of managed properties.
7. Increase and maintain the value of your rental property
By identifying and repairing any maintenance issues early on, you avoid larger and more expensive problems. An experienced property manager will tell you that the key to maintaining and increasing the value of your property is preventive maintenance. This requires regular maintenance checks and inspections, a written maintenance schedule, and detailed documentation. An agency may also offer you valuable feedback and suggestions on upgrades and modifications that the tenants prefer.
8. Personal benefits
- Less stress – By hiring a specialist, you won’t have to deal with late-night emergencies, evictions, chasing down rent, damages, paperwork, having to find contractors, and other tedious and time-consuming tasks.
- More freedom – If you hire a property manager, you can travel anywhere you want without having to worry about your tenants and about the regular inspections. You can live wherever you want and you can invest in other properties.
- More free time – For a property investor, time is money, and your time would be better spent doing other things than micromanaging a property. If you focus on asset management, then you are working on growing your business, if you manage the properties yourself, then you work in it. Not to mention that you will also have more time to spend with your family and friends.
Source: Jon Stul (Bricks + Agent)