The real estate industry is one of the most versatile industries in the market. Despite an increase in home ownership, commercial real estate is still one of the biggest contributors to the U.S GDP with a staggering $935.1 billion. Additionally, by the end of 2019, it is estimated that it will have revenues of over $1 trillion dollars. While the figures may seem phenomenal, it is only prudent if a commercial real estate owner involves several professions to maximize profit. One crucial profession that is mostly overlooked is the role of a real estate management firm. While you may part with an extra buck; benefits got from them are quite extraordinary. Here are nine benefits why you should consider hiring a real estate management firm.
Decades ago, you could have got away with evicting troublesome tenants. However, times have changed, as a property owner, you stand to lose a lot if you infringe on the rights of your tenants. According to appfolio, landlords lose up to $1791 to evict a single resident. While it may seem insignificant, the figures could rise if you consider the amount of money you stand to lose if you add defaulted payments. With a rental property management firm, you probably won’t spend a dime since they have experience in handling eviction cases. Their knowledge of the landlord-resident legal relationship will ensure that all conflicts are solved amicably.
Long term clients
As an owner, you need to prevent frequent tenant turnover, and real estate managers are aware of what needs to be done. With numerous commercial properties being built, maintaining clients for more extended periods can be a huge task. There will always be properties cheaper than yours, but your relationship with your clients can be the reason why they will stick with you. Additionally, rental managers act as the first line of communication between you and the tenant. Before any complaint reaches you, they probably have tried solving it, and the last option is to contact you.
Efficient rent collection
For any commercial property to be considered successful, it has to incorporate an efficient method of collecting rent. Some tenants pay rent several months in advance while others pay on deadline day; maintaining a record of these payments can be quite a task. Additionally, it might cost you plenty of time having to chase down tenants for rent. By enforcing a strict rent guideline, landlords don’t have to spend long hours looking for defaulters. Lastly, a prudent manager will have all the rent details mentioned on the lease agreement along with penalties and repercussions before any tenant takes up the space.
Lower maintenance cost
Apart from preserving your property, excellent maintenance attracts the right clients. People love having value for their money. While you can hire several contractors to handle your repairs, you stand a higher chance of either finding an incompetent contractor or having to pay considerable fees to have several repairs done. With a rental management firm, you will have access to licensed and insured contractors, which means in case of any damage due to their negligence, you can be compensated. Additionally, most property managers are aware of contractors who charge reasonable fees.
Increase the value of your property
Similar to football: the best form of defense is to attack. A property’s value can only rise if it is regularly checked for any damages. Poorly done repairs can cause a host of serious problems which would ultimately cost you a lot of money when repairing. Additionally, having an experienced property management firm can be a plus when it comes to carrying out renovations. This is because they are aware of trending household wares that tenants find attractive.
Personal freedom to the owner
Having a property manager by your side will save you plenty of hustles. For starters, you won’t have to encounter troublesome tenants who will damage or default payments. Additionally, you will have more freedom and time to travel and concentrate on other issues since managers will assume full responsibility while managing your property.
High quality tenants
One of the most significant benefits of having a commercial real estate management firm run your property is that you will have high quality tenants. Handling bad tenants can be expensive and of a great nuisance to you and fellow tenants. While you can have every tenant sign a piece of paper, having prior knowledge of their behavior can help you make an informed decision. Property management firms are notorious for carrying out background checks. This technique can identify troublesome tenants before approving potential clients. Background screening is a complex process that involves several departments and can take a while before getting conclusive results.
Shorter vacancy periods
In 2017, the U.S vacancy rate was 6.18 percent as compared to 5.89 percent in 2016, which signified an increase of 0.29 %. Though there could be a host of reasons why the vacancy rate is rising, it is usually a significant worry to any property owner when his property remains vacant for longer periods. However, having an ideal rental management firm can attract clients to your property. First, they have to determine a perfect amount of rent, which is not too high; lest it will scare potential tenants and not too low that you might lose your investment. Lastly, they will need to prepare your rental spaces for new tenants. A clean, well-maintained space is always attractive to clients.
Simplifying your account books
While tax professionals handle all tax related details regarding rentals; few property owners remain informed on all deductions and maintenance requests. However, ideal property managers share details on all transactions and deductions to the owner. By providing tools such as owner’s portal, they get to share details and reports in a simplified version where owners can remain informed on the happenings of their property.
In conclusion, yes, having a property management firm run your property can cost you an extra buck or even two, but in reality, the benefits are all worthwhile. Not all tenants can be diligent in following rule, hence the need for background checks. Evicting a bad tenant can take you back $1791, which can be significantly more if you include the number of unpaid months.
Image Credits: Matt Jones