Every property owner has to choose between managing their property or hiring the services of property management firms. As a property owner, you may have wondered (for good reasons), asking questions like what particular roles do property managers play? Why are they a better option? What do you stand to gain by hiring a property management agency? Or is it more advantageous to manage your property on your own? What are the risks involved? What are the costs involved? What do you need to know before deciding to hire or not to hire? These questions will be discussed in this article.
The Role of a Property Management Agency
Property management agencies usually are responsible for the following tasks:
Leasing Available Units
Turnovers happen to be an area of property management requiring a lot of work. Many property owners would instead leave the hassle and haggle to be handled by property management agencies.
Property Agencies are hired to supervise all operations from checking-out tenants, checking-in new tenants, organizing lease arrangements, bookkeeping, finances, environmental health and sanitation, and marketing and advertising property units. Property managers play a vital and enormous role in ensuring properties stay attractive and economically viable.
Leasing a property can be so backbreaking that some owners outsource that management aspect while they continue operating in other areas.
Collecting and Depositing Rent
Property management agencies help collect rent and deposit it in the property account. They also serve as the customer service unit interfacing with potential tenants. These usually require responding to emails, phone calls, and website messages, as the case may be.
Unit Inspection, Repairs, and Overall Maintenance
As part of responsible property ownership, landlords expect their leased properties to be inspected at least once or twice annually. This is another role property management agencies are hired to play.
The management agency is expected to oversee all inspection, repairs, and maintenance activities in the units under its care. It is common for tenants to lodge their complaints as they arise. However, the agency must inspect the units and evaluate the situation of the property, come up with repair alternatives, report to the owners, and discuss the details and costs. The property management agency will then oversee the repairs from start to completion.
Also, a property management agency checks if the tenants keep to the lease agreement and maintain sound management practices of units. If the tenants are violating the rental agreement in any way, such as wriggling in more residents, committing a crime, or rearing a pet. If such, the property management agency has the authority to serve the tenant a notice of eviction warning.
Overseeing Legal Actions and Evictions
Property managers are also expected to oversee tenant eviction’s long and sometimes brief process. Typically, the process begins with an eviction warning notice being served, demanding some change of behavior, desist from the violation, or removal from the unit. Eviction ensues when the tenant ignores the warnings and persists in violating the lease agreement.
Eviction is enforced after a prescribed period of waiting. The property manager proceeds to take legal action, filing for removal, and awaits a date for a hearing, presenting the judge with substantial evidence of the breach of the lease contract. Then, after another spell of waiting, the lockout date is given. Usually, this is followed by changing unit locks and hauling out leftover junk from the unit before opening it up again for rent.
Many landlords do not have the time or patience to go through these processes, and that’s why property management agencies are essential.
Bookkeeping and Inventory
Bookkeeping and financial inventory are one of the most critical roles property management agencies are required to handle. It involves documenting all the unit income and expenditures, from leases, repairs, and maintenance to taxes.
Keeping accurate financial records is a huge bonus because it isn’t uncommon to find owners who would care less about balancing their books. Property management agencies fill that gap meticulously.
Risks In Hiring a Property Management Agency
In considering if hiring a property management agency is more advantageous, you have to consider the risks associated with hiring one. Here are the significant risks in hiring a property management agency:
Property management comes with its own costs, including maintenance, repairs, contractor fees, advertising, taxes, and otherwise. Including the property manager’s service fees ordinarily increases the overall management cost. This is why some landlords would instead manage their properties themselves.
Also, some property managers might be opportunistic in their approaches to ridiculous charges. However, property management requires labor which has to be accounted for in investment returns forecasts. The challenge might be deciding on the cost dependent on the agency contract.
Management Policy Control Risks
By outsourcing, you have little or no control over the choice of contractors, the quality of materials, the bills, the frequency of inspections, and the kinds of tenants checking in or out of the property. By contracting an agency, you give them the right to act in your capacity. The challenge arises when their goals and ideas are different from yours.
The property management agency you contract to represent acts in your capacity as the owner. Hence, when they break the law in that capacity, you will be held liable to the law. Notwithstanding, you could sue such an agency; however, that will come at an extra cost.
Can You Manage Your Property Yourself?
Property management requires several skills which merely ‘owning a property does not afford you. Investing in properties and managing properties are two different things. You could be good in the former and terrible in the latter.
Can you manage your property yourself? Do you have the requisite patience, communication, bookkeeping, financial, and management skills? Will it affect your day job? How about your family life? Do you have to relocate? How about traveling expenses and related issues? Do you plan on growing your property units? Will you manage them all yourself?
Property management agencies will relieve you of the burden of managing the hassle of the daily operations of your properties. If you’re looking for a reliable Dallas, TX property management company, look no further than Local Dwelling.