While owning rental properties is a worthy investment, their management comes with many challenges. Poor property management results in unhappy tenants, tarnishes your reputation as a landlord, and other adverse effects. Outsourcing your property management to industry experts lifts the burden off your shoulders. Your investment property’s success lies in how various departments perform.
Handling all of them alone raises the risk of failure as you cannot be an expert in all of them. Nevertheless, outsourcing your property’s management lowers these risks. Determining when to outsource property management isn’t easy. However, knowing the signals to look for can help. Outlined below are seven signs it’s time to outsource your property management.
1. Your investment property is out of town
Being an out-of-state landlord means you reside outside the region where your property is located. It could be a different city, country, or state. As an out-of-town landlord, managing a rental property isn’t easy. Here are the challenges you should expect:
- Real estate markets are distinct, and some could be better than others. Understanding the market trends and values that can raise or lower your return on investment takes a lot of research, time, and effort, some of which you might not have
- Additionally, landlord-tenant regulations vary from one region to another. Laws for raising rents, screening tenants, and failing to renew lease agreements may catch you as an investor off guard
- Investing successfully out of town requires you to have a plan for screening tenants, ensuring timely rent collections, and taking care of your property, which can be challenging for you as an out-of-town investor/ landlord
While you can still manage an out-of-town property, doing so successfully can be challenging. However, outsourcing to a local property management company, such as Florida rental property management, can help handle all the tasks associated with managing your property. This gives you more peace and lets you concentrate on establishing your property portfolio.
2. You own multiple rental properties
Self-managing multiple rental properties is very difficult. Since having vacancies from time to time is normal, filling them can be challenging as it calls for showings and marketing. This can get overwhelming and take a lot of time, particularly when the vacancies are in several properties and the market demand for properties like yours is low.
Tenant screening and ensuring the right selections is another challenge you’ll likely experience as a landlord/ property owner due to the lack of professional tools. As a self-managing landlord, coordinating repairs and maintenance across multiple properties is among the most time-consuming challenges you’re likely to face.
Another significant challenge of managing several properties is handling constant tenant complaints and disputes. If you don’t have time to resolve these issues, you may have a bad relationship with your tenants. As a multi-property owner, time management is a big challenge. If managing several properties has become overwhelming for you, it could be time to leave the management duties to a trustworthy property management company.
3. A rise in vacancies
To make the most of your property, having maximum occupancy is imperative. If your rental property is partially occupied, you aren’t collecting sufficient income, which translates to reduced ROI. A reduction in vacancy rates should be a cause for worry for self-managing landlords, especially because their lack of expertise could be the reason for this challenge. Hiring a local property management company can help lower vacancy rates, increasing your return on investment because:
- They know where to advertise to find tenants quickly
- Their tenant screening experience helps ensure they only accept tenants that are a great fit
- Their professionalism, attention to detail, and staying on top of repairs and maintenance help keep existing tenants happy, reducing vacancy rates
Instead of wasting money and time on vacancy advertising and tenant screening/ placement, outsource your property’s management to a company familiar with the region’s real estate market to elevate rental occupancy rates.
4. Neglected/ overlooked repairs and maintenance
Dealing with repairs and maintenance is among the most time-consuming areas of rental property ownership. Besides the maintenance/ repair work, there’s the logistics of finding a maintenance professional and coordinating programs with the affected tenants. Responding to maintenance and repair needs can be costly and time-consuming. Outsourcing your property management helps ascertain you’re not spending unnecessarily and that you’re doing well protecting your investment’s value and condition. It guarantees immediate response to immediate and routine maintenance.
A reliable property management company invests in technology that lets tenants send maintenance requests digitally. In addition, these professionals have a great network of licensed, insured, and affordable vendors, ensuring quality work and reasonable prices. A professionally managed property incurs lower maintenance costs than a self-managed one. The property managers catch problems early and are always on top of preventive maintenance. This results in a well-maintained property that high-value tenants find attractive.
5. You want to save time and money
Tenant screening needs time and resources. Without these, you might end up with the wrong tenants in your property. This may lead to risk:
- Property damage
- No payments
- Late payments
- Disputes and conflicts
- Lease violations
Outsourcing your property management protects you and your investment from these issues. Property management companies usually gather all the necessary details on tenant applications and screen them carefully and in compliance with local and state fair housing regulations. This ensures that only good tenants are placed on your property. The company looks for a good employment history, stable credit, and sufficient income for monthly rent payments. After a tenant is approved, property managers take them through the lease, which can be time-consuming.
6. Legal matters are becoming challenging
Landlord-tenant laws are complex, which can cause you to unknowingly make a mistake that lands you in legal trouble. Collaborating with a property management company ensures you’re always on the safe side of the law. They give you legal advice and manage your property in a legally compliant manner. Property management companies draft leases to safeguard you as the property owner/landlord without discriminating against tenants. They also ensure evictions are processed correctly.
Different states have varying laws and regulations surrounding rental properties. Most cities have theirs, too. Staying current with all the regulations/ laws can be overwhelming for a self-managing landlord. However, hiring a property management company you can trust can help.
7. You’re falling behind on rent collection
Timely rent collection can be challenging for self-managing landlords with multiple rental properties. Collecting rent is a tedious and time-consuming task. In addition, most tenants may prefer paying in various ways. Outsourcing your property management eases rent collection and ensures you don’t fall behind. Property management companies usually:
- Provide various rent collection methods
- Set up auto-late fees to curb late rent payments
- Provide safe rent collection options
- Send rent reminders as rent time nears
Self-managing rental properties isn’t easy. However, hiring a property management company can help. Familiarize yourself with signs it’s time to outsource your property management to reduce risks and increase rental income.