Do You Need A Property Management Company for Your Rental Properties?

Managing rental properties can be extremely rewarding, providing stable income streams and long-term investment potential. However, landlords often face significant challenges handling all the responsibilities that come with rental property ownership. From maintenance and repairs to legal compliance, the day-to-day demands of managing a property portfolio can become overwhelming, especially when juggling multiple properties alongside a full-time job or other commitments. 

When rental property management starts to feel more like a burden than a beneficial investment, it may be time to consider hiring a professional property management company. There are several telltale signs indicating that the help of a property management service could optimize your rental property ownership experience.

In this article, we’ll explore the top signs that hiring a property management company could be advantageous for rental property owners. Read on to learn what to watch out for and evaluate whether partnering with a property manager could be the right move for your real estate investments.

 

Sign 1: Limited Time and Availability

 

 

Renting out and managing investment properties is often done alongside other major commitments like a full-time job, family obligations, or running a business. Many landlords take on rental properties expecting they can handle it themselves, only to become overwhelmed by the day-to-day demands. 

Juggling rental properties while also trying to balance work, family time, and other responsibilities can quickly lead to time management issues. It’s not uncommon for DIY landlords to fall behind on important maintenance tasks, like timely repairs or preventative upkeep. Responding to tenant requests or inquiries can also get delayed when you’re stretched thin on time.

Before you know it, your rental property management is suffering from neglect. Important but non-urgent tasks keep getting pushed down the priority list. Tenants may start complaining about slow response times or deferred maintenance issues.

Bringing in a professional property management company can alleviate these time constraints landlords face. Experienced property managers handle all the day-to-day rental operations for you. This includes maintenance coordination, tenant communications, lease administration, and more.

With a property manager overseeing these time-consuming details, landlords can step back and focus on bigger-picture strategy and oversight. Relying on a property manager means you don’t have to sacrifice your rental property success for lack of time and availability.

 

Sign 2: Difficulty Finding and Retaining Quality Tenants

 

Finding and retaining good tenants is critical for the success of any rental property. Vacancies and frequent tenant turnover can quickly lead to lost rental income and increased expenses for repairs and maintenance between tenancies. 

Some clear signs that a landlord is having issues with tenant acquisition and retention include:

• High vacancy rates, with units remaining empty for extended periods 
• Frequent tenant churn, with new tenants moving in and out within short periods
• Many applicant inquiries and showings yield few qualified tenants
• Unpaid rent or evictions for non-payment 
• Damage and clean-up costs between tenants

For landlords struggling to find and retain tenants, a property management company can make a big difference through professional tenant placement services. Property managers have extensive experience screening tenant applications, including:

• Credit and background checks 
• Income verification
• Reference checks
• Eviction history reviews

They follow standardized procedures to identify qualified, reliable tenants most likely to pay rent on time and care for the property. 

Once tenants are placed, property managers utilize retention strategies to maintain occupancy. This includes timely maintenance, enforcing lease terms evenly, and resolving tenant issues before they escalate. Regular communication and ensuring a positive living environment also promote tenant satisfaction and retention.

With their expertise in tenant relations, property managers are skilled at reducing vacancies and turnover. Their hands-on approach keeps tenants happy and in place longer, while ensuring a steady rental income for landlords.

 

Sign 3: Maintenance and Repairs Becoming Overwhelming 

 

 

Owning and managing rental properties comes with ongoing maintenance responsibilities. From addressing tenant repair requests to scheduling preventative maintenance and handling emergency issues, landlords with multiple properties often become overwhelmed by recurring repair needs and deferred maintenance tasks.

It becomes challenging for DIY landlords to properly maintain multiple rental units over the long term. Rental properties require diligent systems for regular upkeep – like HVAC inspections, gutter cleanings, landscape maintenance, and exterior paint upkeep. Without proactive maintenance schedules, deferred tasks and reactive repairs can quickly pile up.

Signs that maintenance and repairs are becoming unmanageable for landlords include:

• Tenant complaints about slow response times for repairs
• Urgent issues arising from lack of preventative maintenance 
• Out-of-pocket costs escalating due to deferred maintenance
• Inability to keep up with maintenance requests and property visits
• Properties beginning to look rundown and unkempt

By outsourcing to a property management company, landlords can ensure maintenance and repairs are handled efficiently for all their rental properties. Professional property managers have systems to track and schedule preventative maintenance tasks proactively. They also have trusted contractors available to handle repairs quickly and cost-effectively. 

Instead of getting overwhelmed, landlords with property management oversight can ensure their properties are properly maintained – keeping tenants happy and maximizing rental income over the long run. Proper maintenance and timely repairs demonstrate responsible landlord practices as well – which can pay dividends when solid tenants renew their leases year after year.

 

Sign 4: Legal and Compliance Concerns

 

As a rental property owner, you have legal obligations to your tenants and must comply with applicable housing laws and regulations. This can become extremely complex when managing multiple properties. Some signs that legal issues may be arising include:

• Receiving violation notices from the city for failure to obtain proper rental licenses or registrations 
• Tenant complaints and disputes that are difficult to resolve on your own
• Not staying up to date on changing rental laws, leading to unintentional non-compliance
• Hesitating to enforce lease agreements or start eviction proceedings to avoid potential legal complications

Property management companies have extensive experience navigating landlord-tenant laws and minimizing liability through proper compliance. Their responsibilities include:

• Ensuring all licensing and inspections are completed by local regulations
• Completing thorough tenant screening to avoid problem tenants
• Handling lease agreements, violations, and eviction proceedings appropriately  
• Staying informed on changing rental and housing laws to maintain compliance
• Mediating tenant disputes before they escalate to legal action

Delegating your rental property’s legal obligations to experienced professionals ensures you avoid missteps that could lead to fines, lawsuits, or loss of income. Their expertise in managing all aspects of landlord-tenant law reduces your risk and provides great peace of mind.

 

Sign 5: Desire to Maximize Rental Income

 

 

Managing rental properties provides the potential for generating significant income. However, without proper oversight and management, properties may underperform and fail to reach their maximum earning potential. There are several signs indicating a rental property could benefit from professional management to boost profitability:

Rents falling below market rates for the area – A property manager can conduct market research to price units competitively. Setting rents too low leaves money on the table.

High vacancy rates between tenants – Skilled property managers implement strategies to minimize vacancies, such as marketing efforts and fast turnarounds between occupants. 

Limited or no rent increases over time – Property management companies adjust rents annually and negotiate renewals to match market rates. This ensures rental income keeps pace.

Not enforcing late fees as outlined in the lease – Consistently enforcing late payments per the lease agreement helps motivate tenants to pay rent on time.

Invoking termination clauses infrequently for non-payment – Property managers will adhere to lease terms and pursue eviction if necessary after following proper legal processes.

Professional property managers are tuned in to market conditions, rental rates, and demand fluctuations. They have systems in place to maximize occupancy, collect payments on time, and pursue rent increases when feasible. 

Their expertise and resources can optimize rental income from investment properties. With higher, steadier returns, property owners see their hard work translating into bottom-line profits.

 

Additional Benefits of Property Management

 

Beyond the core responsibilities outlined already, professional property managers provide a wide range of additional services that can improve the rental property owner’s experience and bottom line. Some extra benefits to consider include:

Enhanced tenant satisfaction. By handling maintenance promptly and addressing tenant issues, a property manager helps create a positive living environment that supports tenant retention. Satisfied tenants are less likely to move out quickly.

Rental property analysis and evaluation. Property managers can assess the performance of the rental property compared to the local market and make recommendations for maximizing income and return on investment. This includes evaluating rental rates, occupancy trends, and operating expenses.

Technology utilization. Property management companies provide tech-enabled systems to simplify rental operations, including online portals for collecting rent payments, tracking maintenance requests, and monitoring property performance. This streamlines management for owners.

Property monitoring. When not occupied, properties are at risk. Property managers keep a close eye on routine inspections, security checks, and drive-bys to protect against vandalism, unauthorized occupants, and maintenance issues between tenant turnover. 

Preventative maintenance. Rather than handling maintenance only when issues arise, property managers take a proactive approach to upkeep through seasonal maintenance tasks. This helps avoid major issues and extends the life of systems and equipment.

Hands-off ownership. With a property manager overseeing all operations, owners can step back into a more passive, hands-off investor role. This removes the stress and hassles of being an active landlord.

Peace of mind. Perhaps most importantly, a good property manager allows owners to hand off day-to-day responsibilities and have confidence their investment is being properly cared for and optimized. This provides invaluable peace of mind.

 

Questions to Ask When Hiring a Property Manager

 

 

Selecting the right property management company is crucial for maximizing the success of your rental properties. Here are some key questions landlords should ask when interviewing prospective property managers:

 

What experience do you have managing rental properties?

– Look for a property manager with extensive experience dealing with residential and/or commercial rental properties similar to your own. Ask how long they have been in business and how many properties they currently manage.

 

What services do you provide?  

– Property managers offer a range of services, including advertising vacancies, collecting rent, responding to maintenance requests, paying bills, and handling legal matters. Make sure the services you require are included.

 

What are your fees and how are they structured?

– Property management fees often include a percentage of collected rent plus additional charges for maintenance, advertising, legal fees, etc. Ask about one-time vs recurring fees so you understand the full cost structure.

 

How do you screen potential tenants?

– Thorough tenant screening is crucial, so ask how they check tenant background, credit, income, references, etc. Make sure their process aligns with your standards.

 

How do you handle maintenance and repairs?

– Understand their process for addressing maintenance requests, hiring contractors, obtaining quotes, and keeping you informed. Make sure emergency repairs are handled promptly.

 

Is there transparency in the reporting provided?

– Look for detailed monthly statements on rent collected, expenses paid, maintenance performed, income/loss statements, etc. Transparency is key.

 

What is your communication style and availability? 

– Open communication is essential. Inquire about preferred methods and response times for both you and your tenants. Know who specifically will manage your property.

 

Evaluating Property Management Fees and Expenses 

 

When deciding whether to hire a property management company, one of the key factors to consider is how their fees and expenses will impact your rental property’s bottom line. Property managers typically charge between 5-15% of the monthly rent collected. They may also charge fees for services like overseeing maintenance, placing ads to find new tenants, conducting background checks, and handling legal paperwork.

It’s important to get a full breakdown of all the fees you’ll be responsible for, rather than just an overall percentage. Some questions to ask potential property managers:

– Is there a one-time setup or onboarding fee?

– Do you charge a monthly management fee, and what percentage of rent collected does it represent? 

– Are there additional fees per occurrence for tasks like placing rental ads, showing the property, signing new leases, evictions, etc?

– Do you mark up any maintenance, repairs, or supplies needed at the property?

To determine if the fees will pay off, consider how much rental income you are currently losing from issues like vacancy, unpaid rent, turnover costs, and maintenance delays. Estimate how much a professional management company could increase your annual rental income through better tenant screening, marketing, and operational efficiencies. 

Also, factor in soft dollar savings from freeing up your own time spent dealing with tenant headaches and property upkeep. If the increase in rental income and time savings outweighs the management fees, then hiring a property manager can be a smart financial move. But be sure to get all fee details in writing so there are no surprises down the road.

 

Conclusion

As we’ve discussed, several clear signs indicate when a rental property owner should consider hiring a professional property management company. If you find yourself struggling with limited time, have trouble retaining tenants, are overwhelmed by repairs, are concerned about legal issues, or simply wish to increase your rental income, it may be time to hand off management responsibilities to an experienced property manager.

If the topics covered in this article resonate with your current experiences as a DIY landlord, take some time to research local property management companies in your area. Look for an established company with extensive experience managing similar rental properties. While hiring a property manager does come at a cost, for many landlords the benefits far outweigh the expenses. The ROI from professional management can mean tens of thousands in additional rental income every year.

Stop the rental property frustrations today! Partner with Green Ocean Property Management and let us handle the day-to-day management. With our systems, expertise, and efficiency, let’s maximize your rental property’s potential together.