Being a property owner might sound easy to some people, but owning an investment property can sometimes be one headache after another, especially if you own multiple rental units. Just a few of the issues that owners have to deal with are:Rents that need to be set, paid and recorded; screening and dealing with potential and existing residents, property maintenance issues, the inevitable complaints and disputes, security deposits, real estate taxes, state and local regulatory compliance and unfortunately, evictions. Given the seemingly endless ownership responsibilities, many property owners have delegated most of their ownership duties to professional property managers. The two roles aren’t interchangeable though. Someone might own an investment property with no property manager, but if there’s a property manager, there’s an owner out there somewhere.
What is a Property Owner?
A property owner is a person or entity that owns real estate that is being leased. In the context of a roof over a person’s head, that owner leases homes, condos or apartments to others to live in. When the owner is directly involved in these arrangements, a property manager isn’t involved, and the owner’s monthly income from the property is higher. The bad news about that is that the headaches are far bigger, and they come more often too.
What Does a Property Manager Do?
Owners of residential properties will often delegate many of their ownership obligations to a property management company. The companies become far more involved with the residents than the property owners are. The properties might range from a single-family home to a multi-unit apartment complex. Multi-unit properties are far more likely to be effectively managed through a professional property management company.
The Agency Agreement
Whether a piece of real estate is residential or commercial, property managers are agents of the owners. That relationship is almost always pursuant to a written agreement. Property managers free up valuable time for owners, especially if the owner is an absentee investor and busy doing other things, like looking for and purchasing more investment properties. Most importantly, at the end of the month or quarter, a property management company provides the owner with a check along with a detailed expense report that includes the management company’s fees.
Increasing Your Real Estate Investments
If you own an investment property, there’s no question that if you really want to, you can manage one or two units. You’ll have your hands full though, and what comes to issue is the fact that without a trusted property management company, it’s unlikely that you’ll ever get past managing a few units. With a full-time job and a family, there just aren’t enough hours in the day to look for additional income properties or even do a drive-by, especially if it’s out of town.
When a rental unit becomes vacant, you’re not making a penny off of the dead space either. Without an effective property management company, it could take you months of what little spare time that you have to get the unit in turnover condition. In the interim, the mortgage on that property still needs to be paid. Property managers know painters, plumbers carpet layers and others in the trades who work for them at a discount. That discount can be passed to you as the owner.
Good residents of your properties are those people who pay their rent on time, cause minimal wear and tear and don’t create problems. The property manager’s objective is to keep quality residents happy and living in that unit on a long-term basis. That mitigates against vacancies and makes life easier for you.
Owning investment properties is a challenge, and at one time or another, you’re going to ask yourself if you really want the responsibilities and headaches that go with ownership. Fortunately, you don’t have to do that alone. You can continue working toward your goal of acquiring more properties while our experienced and professional property management company can take over responsibility for the day-to-day operation of your investments.
If you’ve come to the realization that you’re ready for a property manager, our team of professionals at Hignell Property Management want to begin building a long and successful relationship with you. You can carry on with your investments while knowing that they’re secure and in competent hands.