One of the best ways to earn extra income is by investing in property. Owning property can also help in increasing the value of your overall assets as well as building up a financial portfolio.
Even with the benefits to be had from owning property, you still get faced with the decision on whether to handle the management of the property yourself or seek the expertise of a property management company. Before making a conclusive decision on the path you intend to take, the following are the pros and cons of hiring a property management company:
Possibly the only major downside to contracting the services of a property management company is the fact that any profit you make will be taken out to compensate them. Sometimes, these property management companies might require a salary plus a percentage of profits made from any transaction aided by them. But a standard practice for the average property management company is to take the first month’s rent of the property as payment and in future periods, only 8-10% is charged from the rent. This is done in order to cover the costs of advertising, applicant review alongside other general expenses.
Rules & Regulations
As a private individual whose only interest in investing in property is to turn a profit, keeping abreast of state and federal regulations is not something that comes to mind. As a landlord, you want to ensure that you are not at risk of violating any rules in respect to your tenant or the law. So getting a property management company eliminates this worry. If you have a mansion, you want to make sure the person you’re leasing your home to checks out. With someone to help and guide you through the process, it will help you weed out potentially disastrous tenants.
The good thing about property management companies is that they stay abreast of real estate market trends like what prices different properties are going for. The rental market is one that is flexible and prices can be up at one minute and down the other, for an investor, this can be stressful to keep focus of in line with other duties you have. Property management companies have ways in which they can keep track of these things without you having to worry.
As a property owner, chances are you also have an active profession that requires most of your attention and as a result, keeping in touch with your tenant as well as attending to their needs is not something you can do 24/7 and with immediate effect. When you contract a property management company, this means that you do not have to worry about attending to your tenants needs as they take care of it for you.
As a property owner, the condition of your property is one of your topmost concerns so anything that might affect its good state should not be allowed to take root. Tenants are most times the number one causes of property damage and if you can avoid getting a bad tenant, you should do so. The property management company can also help in interviewing your tenants if need be.