Are you a landlord struggling with property management? Then, first, weigh the pros and cons of hiring a property management company to decide if it’s suitable for your property.
Deciding whether to hire a property manager to manage the rental property might be a challenging task. You may not have experience managing a rental property on your own. Perhaps you had a property manager for it, but you hadn’t had as good experience as you had, and now you are wondering whether hiring a property management company for rental property is worth it for you or not.
There are mixed reviews of the landlord’s experience with hiring a rental property management OKC to manage a rental property. In this article, we will guide you to hiring your first rental property management company, elaborating on the property management pros and cons for making perfect decisions.
What Does Property Management Company Do: Their Roles & Responsibilities
Property Management Companies deal directly with prospects and tenants, saving you time and stress over renting out your property, collecting rent, managing problems with maintenance and repair issues, responding to complaints from tenants, and even eviction. Plus, with its know-how and experience, a good property manager handles your property, giving you the peace of mind that comes with knowing that your real estate investment is in good hands.
I have already written another blog post about What Does a Property Manager Do? which includes most property managers’ activities in detail.
Also Read: Ways to Avoid Property Management Embezzlement and Overpriced Fees
Advantages and Disadvantages of Using A Property Management Company
Different types of property management companies exist for property management services, each with strengths and weaknesses. Some specialize in managing a particular rental property type, such as single-family homes or apartments, and others focus on a specific geographic area. Researching and comparing different property management companies is important before deciding on one to hire for managing your rental properties.
Recommended: What to look for in a property management contract
Following are the detailed advantages and disadvantages of using a property management company. Go through the list associated with the benefits and drawbacks of property management companies below and make your own decision.
Advantages of Hiring a Property Manager
According to a study by the National Association of Realtors, landlords who hire property managers typically earn an average of 10% more rental income than landlords who manage their properties. This mentions that hiring a property manager is one of the best decisions of a landlord for good profit margins. Here’s a detailed explanation of the benefits of hiring a management company:
1. Property Management Companies Have Industry Experience
A realtor like OKC Home Realty Services has decades of experience managing rental properties in the Oklahoma City metro area. Depending on how long they have been in the real estate industry, they should have a defined process to manage the rental property. We have a written process and checklist for everything related to our work.
Property managers are required to be licensed by the state. Because we are experienced, license aspects help us know the market’s ins and outs and how to price homes(renting or selling).
We have dealt with tenant fights, adjustments to roommates, lease breaks, evictions, etc. These items can sometimes be daunting for an ordinary landlord, especially if you have never managed rental properties before. Fortunately, property management services providers like OKC Home Realty Services have dealt with these issues and discovered the best ways to combat them.
We help our owners comply with Fair Housing regulations and municipal laws. Some of these rules are basic, and one could easily violate them without knowing.
Note: Property Managers can help you establish a rental price for your OKC property
2. Tenant Sourcing and Screening
Tenant screening is one of the time-consuming tasks. You must go through multiple tenants while choosing a tenant for your rental property. It takes time to source and screen potential tenants, manage property advertisements, take tenants’ calls, and wait for prospective tenants to call and view the rental units. At the same time, tenant screening can be a task of hassle. An untrained landlord may ask inappropriate, illegal, discriminating questions or admit unsuitable tenants. A property manager has experience handling all tenant-related issues and can save the property owner’s time and energy, reduce liabilities, and screen out undesirable tenants.
Property management companies can help you maintain your rental property minimizing vacancy rates, maintenance issues, and repairs while preventing occupancy by squatters. Learn about squatters rights in Oklahoma.
3. Frees Up Your Time
Managing the rental property is also full of hassle. You should be ready 24/7 to answer the call and be prepared to handle repairs to the rental properties. Not only for repairs, but you will also be responsible for collecting rent, leasing issues, inspecting the property, etc. It’s essentially a second job.
A property manager can save you up to 10 hours per week that you would otherwise spend dealing with rental property management tasks. You will no longer have to fix broken windows or leaking pipes. Your reliable property management company will take care of those items.
When you also employ a property manager, your stress levels should go down. No more headaches. Your management company will deal with everything from marketing to the paperwork and tenant disputes. You can live with the reassurance that your manager will take care of everything. They notify you of emergencies and authorizations to spend money on.
Hiring a property manager for your investment property should mean that all the details are handled.
Note: How to Deal with a Bad Property Management Company?
4. Professional Advice
One of the often-overlooked benefits of hiring a property manager is the potential to get advice on your real estate investment decisions. If you are inexperienced with buying and managing properties, they can help you evaluate the neighborhoods in that area and may help you find the right properties to buy. Once you own them, they’ll give you professional advice that can help you maximize your return on investment (ROI).
5. Professional Maintenance
Many new landlords and property owners decide to do maintenance and repairs to their properties on their own. But this may be a big mistake. You’ll get access to professional maintenance and repair personnel by partnering with a reliable management company.
Recommended: What do you know about the Multiple Tenant Lease Agreement?
6. Setting the Right Rental Rates
The right property management company will conduct a proper market analysis to determine the correct rental rates for your rental property, ensuring that you balance maintaining a low vacancy rate, collecting rent, and maximizing your monthly income. OKC Home Realty Services always does this part of our rental listing process.
If you are looking for a rental management company, prepare yourself with the questions to ask a property manager before hiring one.
Note: Learn why to hire a property manager for your property management.
Disadvantages of Hiring a Property Manager
Of course, hiring a property management company also has some disadvantages. But understanding the cons will empower property owners to weigh the benefits against the drawbacks and determine the best course of action for their unique investment goals.
1. Cost
The main cons associated with hiring a property manager is that it comes with fees. This service is, unsurprisingly, not free.
You might wonder how much property managers charge. The price is going to put a dent in your profit margins.
On average, a property management firm would charge the landlord the rent for the first month and then cut the rental income by 8 to 10 percent per month. These are only simple fees; each property management company varies in price, and more secret fees may be available.
To see OKC Home Realty Services pricing, click here.
2. Limited Oversight
Property management companies may not be as committed as you to taking care of the rental property. They often handle multiple properties, making it challenging to fully oversee each rental property’s unique needs. This can affect the overall experience for both you as the owner and your tenants.
3. Less Direct Control
When you hire a property management company, landlords lose total control over the property. You will have less direct control over day-to-day decisions. They will make decisions on your behalf, such as tenant selection, lease agreement, repairs, and maintenance issues. This may also be an advantage. But it can be frustrating if their decisions don’t align with your preferences.
4. Communication Problems
Effective communication is crucial in property management. Communication problems can sometimes arise between you and the property manager. If the management company doesn’t communicate promptly and clearly with you or your tenants, it can lead to misunderstandings, disputes, and even legal issues.
5. High Dependency
Relying on a property management company might make you less knowledgeable about the day-to-day operations of your property. If you decide to manage the rental property yourself or want to be more involved, this could be a problem.
6. Rigidity in Decision-Making
Most property management companies have standardized procedures and policies. They do their job based on their code of conduct. This could lead to a lack of flexibility in handling unique situations in rental management that might arise with your properties or tenants.
Recommended Article: Are property management companies worth it?
Is Hiring a Property Management Company Worth It?
The above explanation is the pros and cons of property management. Ultimately, it’s up to you to decide whether property management companies are worth it based on your long-term and short-term goals and whether you choose the right property manager for your property. If you lack experience or knowledge and cannot dedicate time to your rental properties, you should definitely consider hiring an expert. However, if you prefer to avoid additional costs, oversight, and lack of involvement in your property, then you should consider spending time and energy managing it by yourself.
Also Read: Why hire a property manager?
We understand that being a landlord can be time-consuming, stressful, and even risky for managing properties. That’s why our property management OKC service can take the hassle out of property management. We care for A-Z on managing rental properties so you can focus on your real estate success.
FAQs on Pros and Cons of Property Management
What happens when property management changes?
When a building undergoes a management change, you don’t need to create a new lease. There is no change in the contract between the tenant and the landlord.
Can a tenant break the lease if management changes?
The management company makes sure that the property is in good condition and that the tenant pays rent on time. No, the tenant cannot break the lease with the change in management in normal circumstances.
What are the qualities of a good property manager?
Prepared and Proactive.
Established Relationships.
Market Knowledge.
Professional Manner.
Organized and focused on the details.
Great Communication and Interpersonal skills.
How do you deal with a bad property management company?
Directly Contact the Property Management Company.
Let the manager know what you would like them to do to settle your complaint.
Follow up on any conversations in writing, making a note of the date and time and who you spoke to.
If any disputes, File a Complaint with the Department of Housing and Urban Development.
File a Lawsuit Against the Management Company.
What are the advantages of property management?
These are a few Property Management Pros.
1. Experience in the Industry
2. Tenant Sourcing and Screening
3. Frees Up Your Time
4. Professional Advice
5. Professional Maintenance
6. Setting the Right Rental Rates
Why should you hire a property manager?
1. A Property Manager Knows The Law.
2. Hiring a manager to take care of your property gives you Peace of Mind.
3. Make More Money Over Time with a Property Manager.
4. Maintaining relationships with vendors is laborious.
5. Getting too personally involved with your tenants can cause problems.
Is hiring a property management company worth it?
A good property manager knows to handle every task related to real estate. They manage properties in the most efficient way possible within applicable law boundaries. Managing real estate requires being on call 365 days a year, any time of the day or night when a tenant emergency may arise.
How do you fire a property management company?
Depending on the contract, the landlord may need to provide written notice to the property management company. There may also be financial penalties. You will need to notify the tenants when you make a management change. Learn about the process of property management agreement termination.
How do you deal with problems associated with your property management company?
Keep your communications in writing. Email is good for this. Make clear requests. If you don’t get the level of service you need, consider firing them.
What is the difference between a full-service property management company and a limited-service property management company?
Full-service property management companies manage everything on your property, from rent collection to maintenance to tenant screening to evictions, whereas limited-service property management companies only deal with some of these tasks.
What are some of the tax implications of hiring a property management company?
The tax implications of hiring a property management company will vary depending on the landlord's circumstances. In general, the landlord can deduct the hiring cost of the property manager as a business expense.
What are some of the resources available to help landlords choose a property management company?
There are a number of resources available to help landlords choose a property management company, such as:
1. National Association of Residential Property Managers (NARPM)
2. The American Property Management Association (AMPIA)
3. The Better Business Bureau
4. Online reviews
