Hiring a property management company can free up a property owner from the day-to-day routine of taking care of their properties. This is especially useful for a person that owns properties but is also employed full-time. There are several factors to take in consideration when hiring a property management company. Because the company you hire will be in charge of a substantial amount of money and property, it is vital to hire the correct one. Your decision should be based on how dependable and reputable the property management company is, not how friendly they are. While it is a definite plus if the company is friendly, it is not the main reason to base your decision to hire them.
There are several things to consider when hiring a property management company. There are some of them:
* What they handle
If you are going to hire a property management company, you want to make sure that they are totally dependable. Routines must be followed when running a property management company. The rent must be collected on time, repairs must be made in a timely manner and deposits must be made on time. Whoever you hire must be reliable in all these areas and more. They will need to keep completely accurate records and be able to give you a complete report on any given property at any given moment.
While it is nice to give a new company a break, it is sometimes wiser to employ a company with more experience. Property management is not a job for timid people. You will sometimes confront tenets that don’t or can’t pay their rent and decide it is your fault. This is one of the main reasons that property management companies are hired. You want to find one that is familiar with either making repairs or arranging for them. The property management company can’t be afraid to collect rent and evict tenants. Sometimes new companies are not as familiar with rental laws as one that has been around for a while.
Most property management companies perform their services for a percentage of the rents that they are collecting. Sometimes there are other charges for making repairs or arranging repairs as well as renting the properties out. This is determined by the contract you have with your property management company. The average rate is currently 10%. This means that the company keeps $10 out of every $100. The following chart will show you the average amounts charged for various rents.
Rent – % Rate = Rent Deposited
$250 – $25 = $225
$400 – $40 = $360
$800 – $80 = $720
$1000 – $100 = $900
What they handle
Property management companies can take complete control of your properties and handle everything, such as the rent collections, repairs, renting the properties, and evicting tenants. Make sure that when you sign a contract with a property management company that all aspects of the properties are covered. Never assume that things are covered unless they are spelled out in your contract and how the monetary aspects are covered. This protects you from any unpleasant surprises because you thought something was covered and you suddenly find out that it isn’t.
Take your time when selecting your property management company. This is a business arrangement where you need to feel comfortable with the people you choose. Make sure that they are experienced enough to handle your properties, but not so swamped with properties that yours are not going to receive the proper care. Ask for references and check them out. The time you spend checking out a company before hiring them is far less stressful than hiring a company and finding out that they have disappeared with all the income from your properties.
This may sound like one of those things that could never happen to you, but the truth is that it happens everyday to someone, somewhere. That is why it is important that you take your time to select the right company for you. You have invested a lot of time and money in your properties; you want to make sure that you are comfortable with the company that is managing them. So take your time, do your homework, then kick back, and let the property management company that you selected worry about the business end of your properties.