There are 3 perks that stand above all the rest when it comes to deciding if you should hire a property manager. They are really simple and are essentially the bread and butter of any real estate investment property. The amount of time the unit stays vacant between tenants, the amount of time a tenant stays in the property, and a tight rent collection process are 3 things that will either make or break a real estate investor. A manager is equipped to deal with these three things and maximize the overall potential of your property. An empty property will not keep them employed as the manager after all.
The first perk on the list is the amount of time the unit stays vacant between tenants. This is a critical aspect of a properties return on investment potential. If a property is sitting empty then no one is paying to live there and there is no incoming cash flow from the property to cover the expenses such as a mortgage, property manager fees, maintenance, up keep, and other expenses that are associated with a house that is just sitting empty and taking up space. The manager should make improvements to the property and prepare the property to be rented ASAP. There may be some cosmetic upgrades and updates that the manager suggests to increase the rent rates and get the investor a better return on the initial investment. The manager should make sure that you are not cover charging or under charging for your rental rates because no one profits from that. A good manager will be able to market your property to get it rented quickly and have special rates for real estate ads depending on how many properties they manage.
The second perk on the list is the tenant retention. It really does not do much good to go through all the work of finding the right tenant and getting them into your property to turn around and lose them. There is costs that are incurred every time someone moves out of the investment property. High tenant turnover can be a serious problem and can drastically affect the bottom line of the investment property. A good property manager understands that it costs money to clean the investment property, change all the locks, paint the walls, new carpet if needed, small repairs, and the cost of the shorter vacancy cycle from above.
The third perk on the list is the most important to the bottom line of the property manager, which is a strict rent collection process. The way the rent collection is handled can be the ultimate deal breaker for whether an investment property is a sound investment or a money sinkhole. The rent collection is the ultimate goal and revenue service that allows everyone to get paid including the manager.
The manager should have an established system in place to handle all three of these tasks from beginning to end. The investor can go and travel and even invest in more properties in different areas with their own managers. Freedom is the key benefit that the investor gets from the expense of hiring property manager.