Owning an investment property can be a great way for someone to build long-term wealth. Real estate investors will benefit by receiving regular rental income that can help to pay down their mortgage while also benefiting from long-term real estate value appreciation. While investing in real estate can be a good idea, it's not always a passive form of investment. You'll be required to address resident needs and lease the home. Due to this, hiring a property manager can be a good idea. There are several benefits that come when hiring a property manager to help manage your property.
Help Lease the Property
One of the advantages of hiring a property manager is that you can receive help leasing the property. Keeping your property leased and full is very important and will have a major impact on your overall return on investment. A property manager will have the experience and the resources needed to lease your home. This can include doing market research to determine a fair listing price, placing ads and hosting visits, and best practices for completing the screening process on potential residents.
Another advantage of hiring a property manager for your investment property is that it can come with a lot of conveniences. When you own an investment rental property, there are bound to be repair needs and maintenance issues that pop up from time to time.
In some cases, these can be emergencies that pop up in the middle of the night. Trying to handle this and provide good service on your own is not always practical. When you have a property management service by your side, you can be assured that you have the support you need. The property manager is also typically the point of contact, which can minimize your personal inconvenience.
Avoid Leasing and Management Violations
It can also be a good idea to hire a property manager as it can help you avoid leasing and management violations. There are always going to be local laws in place that govern how you're able to handle certain situations with residents. This can include how you are able to handle evictions, whether you can enter the property, and tasks that need to be handled. If you're not aware of the rules, you could find yourself in legal trouble if you happen to break local rules. When you have a property manager, you will know that they are experienced and can handle everything properly.
Frequently Asked Questions
There are many benefits that come with hiring a property manager, but most people will have some questions about the scope of their services. There are several frequently asked questions in particular:
Can a Property Manager Enter a Home?
Under a property management agreement, a property manager will typically be given the authorization to enter a home on behalf of the property owner. They will normally be able to enter a home to address repair needs, address resident requests, and for other permitted purposes. However, property managers are required to follow local regulations and lease requirements about entering a property during a lease term. Generally, they will need to provide the resident with at least 24 hours notice prior to entering the property.
Can a Property Manager Sign a Lease on Behalf of an Owner?
Signing a lease is typically a major event for both the resident and the property owner. Due to this, the property owner will want to ensure that they're aware of all terms and requirements set forth. The property management agreement set with the property owner could give the property manager the right to sign a lease on behalf of the owner, but the property owner will typically want to review the lease first.
Can a Property Manager File an Eviction Notice?
A property manager can handle all aspects of the management process. This can include ensuring that residents pay rent on time. If they're not paying on time, the property manager will often have the right to pursue any actions that are described under the lease, which can include enforcing an eviction. As there is a lot of sensitivity and local regulations surrounding the eviction process, there's a good chance the property manager will work with legal representation when filing for eviction.
Can a Property Manager Raise Rent?
A property manager is often granted the ability to sign leases on behalf of a property owner. This can include raising rents by a modest amount each year and at the end of the lease term. A property manager will not be able to raise rent during the lease term as the rental rate will be fixed or set in advance. A property manager could enforce late fees and other penalties if they are permitted under the lease.
Can a Property Manager Represent a property owner in Court?
A property owner may have various legal disputes and issues that arise from time to time. A property manager may be able to represent the property owner in court if they also happen to be an attorney, however, it's best to defer to your legal counsel.
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These are just some common questions property owners have about what a property manager can and cannot do. Ultimately, there is much more that a property management company can do to help a property owner, then if they were trying to do it all themselves. The relationship between a property owner and management company is mutually beneficial and the as long as there's open communication and the scope of work is understood, using a property manager ultimately saves time and headaches.