Hiring a professional management company may be worth the price you pay because it provides a strategic buffer between you and your tenants.
Managing rental or lease property can be exciting and fun, because it is one of those aspects of the real estate business that draws upon a variety of different skills, talents, and areas of interest. For instance, you might wake up in the morning with a project to choose paint for the living room, then have to meet with the landscapers before lunch and grab a quick sandwich before making rental income deposits.
But as the old Swedish proverb says “the morning never knows what the afternoon has in store”. On any given day, you could have a host of errands to do – or emergency calamities to solve so that your tenants are safe and comfortable in their homes. Plumbing problems refuse to respect our vacation time, broken heating and air conditioning units can demand immediate attention, and something like a kitchen fire, break-in, or vandalism can suddenly take center stage in your otherwise organized and peaceful life.
For a fee – about 5 to 10 percent of your gross rental income in most cases – you can delegate your landlord responsibilities to a professional management company. The downside of hiring a manager – besides the fees involved – is that management companies usually handle multiple properties, so yours may not get the kind of personal attention it might if you take a more hands-on approach. The upside, however, is that you have more free time to spend with your business, your family and friends, or – if you like – still continuing to manage the aspects of your property that fall outside the job description of your management firm. Just because you hire professional management, in other words, it does not mean that you have to stop being involved. You can add a management company to handle some aspects of the landlord to-do list, for example, and do the others that you especially enjoy yourself. Then can collect rents, screen applicants, manage building contractors, and even market and show your units when they are vacant and need to be filled.
Some landlords hire responsible and reliable tenants to handle chores like dragging the trashcans to the curb on trash day or clearing snow from the walkways in winter. You can usually do this in exchange for reduced rent. If, for instance, someone leasing one of your apartment units is a police officer, they might be interested in providing part-time security in exchange for lower monthly payments.
If you decide to hire a pro, you will want to check their background, references, and track record. One way to do this is to talk to tenants at other properties they manage. A satisfied tenant is, after all, one of the primary goals of being a responsible landlord. You can also find credentialed professionals through the Institute of Real Estate Management (IREM) which is part of the National Association of Realtors (NAR). They offer training courses and award special designations to those who prove their expertise through a combination of academic study and real world experience. To apply for those credentials – which include Certified Resident Manager (CRM) and Certified Real Estate Manager (CREM), members of these organizations have to first be first have a valid real estate license.
You can also take advantage of educational courses yourself – and earn your own designations – through organizations such as the National Apartment Association and the Building Owners and Managers Institute International (BOMI). Within your own area there may be similar courses offered at a community college, and you may find distance learning opportunities through colleges and schools that offer coursework conveniently via the Internet.