The right rental management company can make being a landlord easier—and maybe even more profitable. One of the biggest decisions you’ll make as a landlord is whether you should hire a rental property management company. Many landlords manage properties on their own or with the help of an employee, such as a resident manager. But sometimes landlords need more help, and that’s when hiring a professional property management agency might make sense.
Property management companies can be a huge asset to your business, but they don’t come cheap. And there are other reasons why you might not want or need one. Here are some things to consider when hiring a property management system.
How to Start a Rental Management Company?
We are a full-service rental property management company, serving the Fresno and Madera County community for over 35 years. We have a large inventory of properties for renters to choose from, located in a variety of settings from quiet country neighborhoods to vibrant communities bustling with families. Our company is built on the principles of family and community, from property owners to service personnel, and those in our management office. We value long-term relationships and many of our vendors have passed down their trades and skills to the next generation. This is the same way the founder of our company passed it on to us.
We would love the opportunity to create the same kind of relationships with others seeking to have their properties managed in the same considerate and attentive way and hope that you’ll choose to join us on the journey.
What Does a Rental Management Company Do?
Most rental property management companies deal with the whole range of landlord activities, including:
- advertising the rental
- screening and selecting tenants
- collecting rent
- overseeing maintenance and repair issues
- responding to tenant complaints, and
- handling evictions.
Need Professional Help? Talk to a Landlord-Tenant Attorney
Please answer a few questions to help us match you with attorneys in your area. Plus, a good management company brings its know-how and experience to your property, giving you the peace of mind that comes with knowing your investment is in good hands.
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Party a Rental Management Company
Although hiring a Rental management company has many advantages, using one can be expensive. And, even apart from the cost, relying on a property management company is not for everyone.
Consider hiring a Rental property management company if:
You have lots of properties or rental units. The more rental management company you own and the more units they contain, the more you’re likely to benefit from a management company. You don’t live near your rental property. If your rental property is located far from where you live, hiring a Rental property management company can be invaluable in dealing with the many issues that you will not be able to handle from afar. If you live out of state, check the state’s laws—you might even be required to hire an in-state management company.
You’re not interested in hands-on management. Many landlords look forward to the challenge of finding good tenants and the rewards of maintaining a safe and attractive property on their own. But if your rental property is solely an investment, and you want little or nothing to do with the day-to-day management of your properties, consider hiring assist to manage your property.
Your time is limited in rental management companies. Even if you enjoy hands-on management, you might not have much time to devote to your business, especially if landlord isn’t your day job. And, if you prefer to spend your time growing your business by searching for new properties, arranging financing for renovations, or changing your business structure, then a management company might be a good way to spend your money.
You can afford the cost. Hiring a management company is an answertenant attractive option if you can afford the fees. When interviewing companies, expect to hear quotes ranging between 5% and 10% of what you collect in rent revenue. If it’s a down market and you’re able to manage things yourself (or with the help of a resident manager or other employees), you might want to keep doing so until the market turns around.
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You’re Suddenly Inundated with Management Tasks
If your business is growing, at some point you might find that you need a substantial amount of help to manage everything properly. At that point, it might make sense to hire a management company.
You don’t want to be an employer. If you hire a resident manager or other employees to help with your property, you become an employer. You’ll have to handle payroll and deal with a host of other legal requirements and considerations. But, because a Renatl management company isn’t your employee (it’s an independent contractor), and neither are the people who work for the company, by using one you avoid the hassles of being an employer.
How to Find a Good Rental Management Company?
Your property is part of an affordable housing program. If you participate in an affordable housing program, things can get complicated. Usually, in these programs, the landlord receives financial assistance, which might be in the form of a grant, low-interest loan, or tax credits, in return for agreeing to rent at least part of the property to tenants earning below a certain income level. In order to continue receiving assistance, the landlord must comply with a complicated set of rules. With so much at stake, it’s often worth hiring a Rental property management company that has expertise and experience with the particular housing program in question.
How Much Do Rental Management Companies Cost?
If you decide to hire a Rental management company, use caution in selecting one. Here’s how:
Get recommendations from colleagues and your local apartment association. Search professional directories on the Internet. Visit the Institute of Real Estate Business Plan & Management’s Membership Directory to search for certified property managers. Or search the National Association of Residential Property Managers site for a NARPM property manager. Interview companies to get all your questions answered before handing over the reins.
When you interview Rental Management Company potential property managers, one of the topics you’re sure to discuss will be cost. How property management companies get paid can vary depending on the market rate in your area and the services the company provides. You may also visit Answer Tenant’s social media page for more informative information and interesting posts.
Real Estate Business plan
Most Rental management company will charge a percentage of the monthly rent—typically anywhere from 5-20%. Be sure to ask the company what services the charge includes, and whether the amount is based on the amount of rent charged or the amount of rent actually collected. Find out what the company’s policy is when a tenant fails to pay rent or breaks the lease.
You’ll also want to ask whether the company offers flat-rate services. For example, do they charge separately for preparing and serving a notice to quit when a tenant violates a term of the lease?
When you find a management company that you feel comfortable working with, be sure to get your agreement in writing. The Real Estate Business plan management agreement should at the very minimum contain details about how and when you’ll pay for the services and how the agreement can be ended (usually it’s with 30 days’ written notice by either party).
To learn more about protecting yourself when hiring a management company and to get help with other risks facing landlords, read Nolo’s Every Landlord’s Guide to Managing Property.
Other great books for landlords include:
- Every Landlord’s Guide to Finding Great Tenants
- Every Landlord’s Legal Guide
- Every Landlord’s Tax Deduction Guide
- Leases & Rental Agreements
- First-Time Landlord
Nolo’s Landlord Rental Management Company also contains a wide-ranging library of free articles for landlords looking to learn more about screening tenants, handling security deposits, dealing with repairs and maintenance, evictions, and much more.
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Frequently Asked Questions (FAQ’s)
Why should I hire a Rental management company?
Hiring a Rental Property Management Company can save you time and effort by handling property ownership responsibilities. They can help maximize your rental income, ensure tenant satisfaction, and handle legal and maintenance issues.
How do I choose the right Rental property management company?
To choose the right company, consider their experience, reputation, fees, and services offered. Ask for references, read reviews, and interview potential companies to ensure they align with your property management needs.
What services do property management companies typically offer?
Property management companies offer a range of services, including property marketing, tenant screening, rent collection, property maintenance, lease management, and accounting. Services vary by company.
How much does it cost to hire a Rental Property Management Company?
Property management services vary, typically 5% to 12% of the monthly rent collected. Some companies may charge additional fees for specific services, so it’s essential to clarify the fee structure.
Can I still be involved in property decisions if I hire a Rental Property Management Company?
Yes, you can remain involved in major decisions. Most Property Management Companies will consult with you on significant issues such as setting rental rates, approving tenant applications, and handling property maintenance.
How does Rental Property Management Company deal with tenant-related issues?
Property management companies handle tenant screening, lease agreements, rent collection, and tenant concerns. They aim to ensure tenant satisfaction and handle disputes or evictions if necessary.
What should I expect from monthly reports provided by Rental Property Management Companies?
Monthly reports typically include details on rent collected, expenses incurred, maintenance performed, and property-related updates. These reports help you track your property’s financial performance.
Are property management companies responsible for property inspections?
Yes, property management companies often conduct routine property inspections to assess the property’s condition and identify any necessary maintenance or repairs. These inspections help maintain property values.
Can I terminate my contract with a Rental property management company?
Yes, you can terminate your contract, but the process may vary depending on your agreement terms. Be sure to review your contract and discuss termination procedures with the company in advance.