Being a landlord isn't the easiest job by any means. In fact, if you're not up to it, your multi-family investment property can suffer due to inexperience, a lack of direction, or a wayward strategy. If you need help and want to take a more off-hands investor approach, hiring a property management company will make your building more profitable.
How Can Property Management Companies Improve Building Performance?
Property management companies offer a wide range of services to investors to help manage the day-to-day operations of the property. Their expertise can also be capitalized on to build a more long-term performance strategy. Just when you thought you were losing, a property management company can put you back in the game.
1) They address tenant issues. For starters, a property management company can help you with tenant problems that arise from poor screening methods. This issue fits into your goals and long-term strategy for the building. They can help you attract and keep your ideal tenants while evicting the unwanted riff-raff that currently occupy your units.
Screening prospective tenants is a huge part of being a landlord and is one of the most important tasks. A property management company knows the right questions to ask and what information to look for. Plus, prospective tenants like to contact property management companies directly for information. The average prospective tenant contacts 4.7 management companies when looking for a unit.
Good tenants will pay good rent on time without fuss and won't cause you any problems. They will stay around because the building feels like home, which will decrease your overall vacancy rate. Bad tenants cause more trouble than they're worth. They make other residents angry, are late with the rent, and cause other problems. A property management company will help you evict undesirable tenants and get the right ones to replace them. Problem tenants generally stay away from multi-family buildings when they know applications are being reviewed with a fine tooth comb.
2. They review current operations. This service is valuable to investors for many reasons. To increase profits, many investors can cut down expenses but don't know how or where to start. A property management company can come in, review what is currently happening, propose changes, and see results. If you want to cut operating expenses by 5%, a management company will work with you to make that happen. In many cases, proactive maintenance can reduce costs.
Another thing they can assist you with is the creation of a budget. Projecting expenses for the current year will give you an idea of big upcoming costs, as well as the amount of money you can bring in. A property management company knows what expenses are common and what could unexpectedly pop up and say hi. A budget will help you avoid surprises.
3. They create a long-term strategy that reflects your wants and needs. Having a strategy in place for your multi-family building is critical. You need a roadmap to your end goal. If you're driving with no end destination in sight, all you are doing is wasting gas. A property management company can help you identify key goals and roads you can take to get there. If you want to attract better quality tenants, you may have to do some renovations. Your management company can put that all in place for you, hiring skilled tradespeople, notifying tenants, and working within your budget to get the best results possible for you. They can also propose different income avenues to increase the cash flow generated by your investment.
Property management companies are a huge asset to investors. Not only can they take care of everyday problems and operations, but they can also help you increase the performance of your building. By screening tenants, creating a strategy, and reviewing your operations, a property management company will get you the results you need.