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5 Myths About Using a Property Manager
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- “It costs too much money.”
Actually, using a property manager will
increase NET rental income in most cases. Rental property owners managing their
own property tend to “discount” their rent in order to attract residents.
Experience, however, indicates that property managers charge ‘Market Rent” and
therefore attract and qualify better residents. Any fees or costs involved with
the use of a property manager are more than covered by the increase in rental
income.
- “I’ll lose control of my property.”
Most property managers will
be able to anticipate the potential for a lot of rental property
problems....tenants want to buy a house; can’t pay their rent on time; need
“special handling”. Experienced property managers have handled many tenant
issues before and can work with owners and tenants to resolve difficulties.
- “I want to do property repairs or designate repair people familiar with
the property.”
Property managers are often willing to use owner
designated or repair personnel familiar with the rental property. In many
instances, when repair personnel utilized by the owner are unavailable, the
property manager can utilize their own vendors and repair people and ultimately
save the owner money. In reality, service personnel would much rather work with
a professional property manager familiar with their services rather than deal
with individual owners.
- “I think I can get better tenants.”
Visit a few tenant “gripe”
sites on the web and you will read what tenants really think about
non-professional property managers. Rental property owners often manage by the
“wish/hope” management theory - they wish their tenant would pay their rent and
hope that they don’t destroy the property. A professional property manager has
the tools at hand to screen and qualify good tenants willing to pay market rent
for the rental home.
Also, a professional manager has the ability to negotiate with the tenant and
the owner to create a win-win with no “ego” involved. Rental property owners
quickly tire of dealing with abusive or complaining tenants and become
non-responsive; OR, they do way too much for their tenant’s benefit and their
investment becomes a “cash drain” and unprofitable. A professional property
manager knows what is required under state and federal laws as well as the
controlling written lease agreement. If the tenant’s request is unreasonable, an
alternative might be suggested. If a tenant’s request is reasonable and the
owner’s property would ultimately benefit, a property manager can point out the
benefit of the request.
- “I would like to “try” management myself, first.”
Unlike many
investments, the ownership of rental property is governed by many laws and
regulations. The federal government not only has tax regulations, it also has
fair housing, lead based paint and other onerous regulations that apply to
rental property. The state may also impose more fair housing regulations as well
as landlord-tenant laws and regulations to govern the relationship. Learning all
these rules and applying them properly is very time consuming.
Keeping current with these various rules and regulations is onerous and not
knowing items and procedures are required can be costly in the long run.
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