Many self-employed people decide to start investing in real estate to generate income and build long-term wealth. When done correctly, it can be lucrative and successful.
What many people don’t realize about real estate investing is when you become a landlord, you don’t need to bog yourself down with property management. Those who undertake it all often burnout and struggle to maintain work-life balance, and their properties and personal lives suffer the consequences.
If you are a new landlord managing a long list of property responsibilities, it is essential to quickly grasp the difference between being a landlord and a property manager. Each role is different, and landlords often thrive with a property manager on their side.
Here’s a look at how property managers can help landlords manage their properties.
Rent responsibilities
When you start investing in real estate, you learn to sharpen certain skills such as identifying hot markets, contract negotiations, interpreting market trends, and much more.
While the role of landlord is chiefly ownership, daily operations can be considerable depending on the size of the portfolio, types of properties, and general scope of the business, and this is where a skilled property manager can assist.
When a landlord onboards a property management company, they often have an idea of going market rates based on research and actual comps. The properties may already be occupied or newly listed. While you focus on the bigger macroeconomic picture, a property manager can handle the details: set rental price, maintain operating budgets, etc. They can focus on the small details to ensure profitability while you focus on your next deal.
Tenant responsibilities
Are you tired of late-night calls from tenants? Perhaps the stress of maintenance problems on older properties has become overwhelming?
Managing tenants can be another job within itself. However, a property manager can step in and assist with the responsibilities, which often include: screening applications, managing tenant relationships, resolving tenant complaints, and more. A partner that handles these details is a real value add for landlords that lack the people skills and “front of house” personalities that the industry often requires.
A property management company can add a professional touch to tenant interactions. They can also leverage technologies to manage tenant applications and maintenance requests, perform background checks and handle rent collection.
The cost implications of property management services
As a landlord, it’s certainly possible to manage properties on your own –– many do so with single-family homes or a few small multi-family units. In this case, it doesn’t always make logistical or financial sense to hire a property manager. However, as you grow your real estate portfolio, hiring a property manager makes more sense.
While rental rates may be higher at managed properties as they absorb the costs, it is often worth it. Some tenants may even prefer living in a managed property because they receive better customer service and perceive the trade-off to be worthwhile.
Property managers collect a fee for their services, regardless of property performance and profitability. However, once a property manager takes operational tasks off your plate, it frees you up to pursue new revenue streams.
While some landlords succeed at wearing multiple hats, including that of a property manager, many admit they aren’t up to the task of doing it all. And that’s okay.
Delegating and letting go of areas of responsibility can be difficult for any business owner or investor. If your long-term plan includes property management services, focus on choosing profitable investments, and put them in the hands of someone who can help them thrive.
Craig Lebrau is the CMO of Media Insider, a Wyoming-based PR company that aims to disrupt the way companies communicate their brand in the digital era.
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