Author: John Duncan

  • Pros and Cons of Hiring a Property Management Company

    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:

    Cons

    Profit Margin

    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.

    Pros

    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.

    Market Trends

    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.

    Communication

    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.

    Sorting Applications

    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.

     

     

  • Most Common Issues Landlords Have With Tenant

    The real estate business is one that has a lot of facets to it therefore, it is quite normal to find different participants engaging in it from realtors, brokers, landlords, and tenants etc. A way to get into the real estate business can be by owning a rental property which is its own form of rewards if done right.

    Even with the best intentions, owning a property and being a landlord still has its own issues and one of the major causes of such issues are the tenant. When it comes to tenants, even if the screening process is as strict as possible and a lot of background checks are done, the fact still remains you never know a person until you get to live with them.

    Here are a lot of complaints and issues which landlords have about their tenants but this article is only going to focus on the most common.

    Delayed Payments

    For a property management business, the rent received from the tenants most times goes into the maintenance of the property and settle other expenses such as land taxes etc. delayed payments can affect the fluidity of operations if not monitored carefully.

    The law dictates that the conditions set in the lease agreement are binding to the parties involved so you have the right to collect rental payment according to those conditions. It is, therefore, no problem if as a landlord, the tenant gets evicted as a result of this. However, if a tenant does not pay their rent for a certain number of consecutive months, be careful because they may gain squatter rights.

    Security Deposit

    Tenants have the misconception that a security deposit serves the same purpose as the month’s rent not paid but this actually not so as they are two different things. According to the law, security deposits are used as payment for unpaid rent when the tenant is unable to hand forward the one of that period but in most situations, the security deposit is lesser than the rent collected and is not enough to cover important things like cleaning and repair expenses.

    Disorderly Conduct

    During the screening process for tenants, most of them tend to be on their best behavior and put their best foot forward. The only time you get to see their true colors is when they have fully settled into the property. Most of them start to develop unruly habits and cause a ruckus by throwing parties, making noise beyond the allowed decibel, causing property damage, being rude to fellow tenants and also aggressive towards the landlord. A tenant that behaves in this way can be lawfully evicted as long as there is witnesses and documentation attesting to this.

    Most of them start to develop unruly habits and cause a ruckus by throwing parties, making noise beyond the allowed decibel, causing property damage, being rude to fellow tenants and also aggressive towards the landlord. A tenant that behaves in this way can be lawfully evicted as long as there is witnesses and documentation attesting to this.

    Violation of Rules

    One of the reasons why lease agreements are drawn up is so as to have documentation serving as proof especially in cases where they would be important.

    Also, the lease agreement allows for both parties to bring up conditions they would like to be fulfilled during the course of the arrangement such as no pets allowed, certain times which visitors allowed, sub leasing conditions, having parties etc. Once the agreement has been signed by both parties and unless another agreement is made at a future date considering the first one void, the terms set have to be stuck to. Sometimes, tenants go ahead to break these codes which cause issues for the landlords.