Landlording — if you choose to do it yourself — is a high-risk, high-reward game.
New landlords often try to maximize their profits by managing their own properties, but the do-it-yourself approach can actually end up costing you money. That’s because most property owners and landlords (particularly those who are new to the game), do not have the experience, expertise, or resources that a professional property management company does.
Whether you are an individual property investor or own multiple properties, MARDA Management Inc. will show vacant units, screen tenants, as well as properly assess tenant qualifications, sign leases, collect rent and deposit in the owners’ bank account, conduct move in and move out inspections, provide a place for tenants to report emergencies – no matter what time of day it is, field tenant complaints and maintenance concerns, convey the ever-changing landlord and tenant legislation, and closely follow local market trends that ultimately affect your investment.
NO. 1 – QUALITY MARKETING & REDUCED VACANCY LENGTHS
Every day a property sits vacant, it costs you money, so the less time your property remains vacant, the better for your wallet.
For anyone new to property ownership, or who want to start building their portfolio, here are 7 ways hiring a property management company, like us, can actually save you money:
Using a property management service that has a marketing budget and the engines in place to get maximum exposure for your property can mean the difference between months on the market or just a few days.
With a property management company, renters are actually trying to find you; you don’t have to go looking for them.
Plus, well-managed properties tend to retain tenants, so you have fewer vacancies in the first place. The typical vacancy costs at least one month’s rent, plus the additional expenses of cleaning, changing the locks, painting damaged walls, possibly installing new flooring, making repairs and other improvements, marketing, and more. If you can reduce the number of vacancies you have, you save money.
NO. 2 – HIGHER QUALITY TENANTS
What can make a vacancy even more expensive? A bad tenant. Unpaid rent, eviction costs, and extensive damages can add thousands of dollars to what you would pay for the average, no-drama vacancy. (Legal fees alone for an eviction run from $300 to $1,000, according to Real Property Management.) String three or four bad tenants in a row, and no matter how well you initially invested, your property could suddenly be a money loser.
You make no money when the property is vacant, but you can actually lose money if you lease to the wrong tenant.
A good property management company will conduct a thorough tenant screening, including a criminal background check, verification of employment, and review of his or her rental history. Management companies like us will actually call the employer and previous landlord and ask the right questions, and because we as a company have experience with countless applications, we will see the warning signs that are often overlooked by a landlord who just wants to stick a warm body in the property.
In addition, hiring a property management company to screen your tenants helps protect you against rental scams from “professional tenants” who don’t pay but are hard to evict and from discrimination lawsuits resulting from inconsistent screening processes.
The legal costs of defending and even proving you are right, based on an alleged Fair Housing Violation, can exceed the value of the property. A professional property manager is a cheap insurance against such a possibility.
NO. 3 – REDUCED MAINTENANCE COSTS
When your property has a maintenance issue or needs a repair, you can benefit in several ways by working with a property management company.
First, you get access to our own in-house maintenance staff. Depending on the exact service, of course, general maintenance and repairs are often included in your monthly fees, saving you this expense altogether.
If the service or repair needed can’t be done by one of our own maintenance persons, then we will turn to our network of licensed, bonded, and insured contractors. These will be contractors with whom we have a good relationship, so you know they do quality work, something you can’t be sure of if you try to find a handyman on your own. Shoddy work eventually will cost you when the repair needs to be made or the work was redone entirely.
Also, since we deal in volume, we can usually secure reduced rates for the contractor’s services. You end up paying less for the work, and depending on the repair, that discount could save you several hundreds of dollars.
NO. 4 – INCREASED BUYING POWER
Volume discounts aren’t limited to contractors’ fees. Name a service, and your property management team will probably be able to offer it for less than the market rate either because it has someone on staff, like an in-house attorney, or because the company gets a volume discount. Obvious examples include cleaning services, carpet cleaners, pool maintenance, lawn care, attorneys, accountants, and insurance representatives.
Other discounts and savings might surprise you. For example, property management companies should be able to secure reduced banking rates if a lot of their clients open accounts with a particular bank. The do-it-yourself landlord probably won’t get a discount at all.
NO. 5 – TIGHTER RENT COLLECTION PROCESS
If you let them, some tenants will walk all over you, especially when it comes to paying the rent. Since consistent cash flow depends on collecting the rent on time every month, you need to be firm — late is late, regardless of whether the tenant has broken up with her boyfriend or lost her job.
When you hire a property manager, you put a buffer between yourself and the tenant. You don’t have to listen to the excuses, chase down the rent or, if it becomes necessary, evict the tenant — the property manager takes care of all that. And, because he has been trained to handle difficult tenants, a property manager isn’t going to be susceptible to a hard-luck story. He is simply going to enforce the lease.
The do-it-yourself landlord, on the other hand, usually has a more difficult time sticking to the terms of the lease and tends to be more susceptible to excuses, which could lead to skipped rent payments and a delay in the eviction process. Using a property management company mitigates this potentially disastrous situation.
Property management companies also renew leases in a timely manner, something individual landlords are not as diligent about. Renewing the lease — instead of allowing it to go month-to-month — allows for an adjustment of the rent rate. If you charge less than market value for the property, you aren’t collecting what you should be for rent, and you are losing money.
NO. 6 – FEWER LEGAL PROBLEMS
National, provincial, and local laws govern the rental market. Failure to adhere to these laws, especially the Fair Housing Act, can result in significant monetary penalties —we’re talking hundreds of thousands of dollars. Unless you’re a real estate attorney, you’ll have a difficult time as a do-it-yourself landlord knowing what laws apply and keeping up with changes in the law.
A good property manager knows all applicable laws and may even have an attorney on staff. Policies will be in place — and strictly enforced — so that laws are not violated. For example, the property management company will have set guidelines for qualifying tenants to avoid a perceived violation of the Fair Housing Act.
Sometimes, though, a lawsuit is unavoidable. When you do have to go to court, a property management company can refer you to its in-house counsel or to another experienced real estate attorney. Their expert legal guidance can save you from a negative outcome or, at least, minimize your exposure.
NO. 7 – MORE TIME FOR YOU
Time is money, and your time can be more profitably spent at your day job or finding other investment properties. (And, although the profits aren’t as tangible, your time can be better spent with your family on the weekend or sleeping instead of taking a midnight phone call for an emergency repair.)
A property management company can lease your property, qualify tenants, collect rent, field phone calls, handle repairs, renew leases, enforce the lease, evict tenants and so much more for a comparatively low fee. One lawsuit avoided, one eviction averted, even one less month with a vacant property can cover the cost of hiring a property management company.
MARDA Management Inc. is essentially the “eyes and ears” of investors who are looking to ensure the success of their rental property ownership in Windsor. We work closely with our owners to ensure their goals are met and expectations attained. We place a high emphasis on communication with not only the owners, but also with the tenants, and we work diligently to ensure that the tenant experience is a positive one. By doing so, we are fortunate enough to gain loyalty among our renters who in turn look to rent from us at various locations if the one they are in no longer meets their needs.
If you’re a property owner and feel overwhelmed by all of the red tape and legal verbiage that comes with it, you don’t have to go it alone.
Give us a call at 519-255-RENT or email us at info@mardamanagement.com to get a free property management informational package.
