The Importance of Property Management to Landlords and Tenants

When investing in real estate, your property management strategy is the second most important key to success (after the property’s locations). Your chosen management strategy determines the future size of your portfolio and whether your property investment is passive or active.

Property management also influences tenants’ quality of life while they live or work in the rental.  The wrong direction can take a great rental and degrade it to unprofitable. But good management can transform a humble rental into a star property.

The location and features of a rental don’t mean much unless the investment is managed right. This is why you should give the same level of attention to property management as you assign to other critical factors in the success of your rental property, such as location, financing, and taxes.

How should you manage an investment property?

There are only two ways to manage a rental property; self-managed or overseen by a property manager. Self-managing rental limits its performance and the investor’s ability to grow. The second option offers more benefits to the landlord and the tenants in their property.

How Property Management Impacts Landlords and Tenants

Hiring a professional property manager to oversee the day-to-day affairs of a rental property will do the following for you as an investor and for your tenants.

How Property Management Benefits Landlords

• Efficient marketing: Property managers have a range of tools for online and offline rental marketing; they can find tenants faster—their marketing expertise results in lower vacancy rates and shorter turnover periods. Property managers also get bulk discounts on ads since they buy in large volumes.
• Structured property maintenance: Property managers can attract the best technicians to maintain the building because they guarantee those tradesmen constant work. A property manager also knows from experience how to maintain the property most cost-effectively.
• Compliance with local laws and regulations: While landlords often struggle to stay abreast of landlord-tenant laws, property managers fully grasp these guidelines. They can help landlords avoid trouble with the authorities. A competent property will also ensure that the physical structures of the building are up-to-code.
• Relationships with local experts: Having worked in the area long, property managers have a web of relationships that can benefit the landlord. These include valuable partnerships with vendors and access to respected professionals in the area.
• Effective tenant screening: Property managers are less likely to lease to a problem tenant than landlords. This is not just because the property manager has access to superior tenant-screening methods – which they do. It is also because property managers have a sixth sense that helps them detect problem renters instinctively.
• Avoid legal liability: Property managers know all the potential loopholes that litigious individuals (past and current tenants, visitors to your property, and workers) can exploit to bring legal charges against you. A competent property manager will help you avoid these legal difficulties.
• Better tenant management: Collecting the rent on time, enforcing the lease terms, and carrying out evictions; are the uglier aspects of managing a rental property that many landlords struggle with. A property manager has the systems and experience to deal with these messier aspects of real estate investing.
• Improved overall performance: A property manager will make your rental property more profitable by cutting costs, improving tenant retention, reducing vacancy rates, and attracting higher-paying tenants to the home. A competent property manager will also improve your investment property’s appeal and market value. Property managers make you more money than you pay them.

How Property Management Benefits Tenants

• A feeling of freedom: Tenants prefer properties with minimal or no contact with the owner. They find talking to a property manager more accessible than the property owner. A rental that is under management is also more attractive because tenants assume the home will be managed with more professionalism.
• Better service quality: Properties under the care of a professional property manager often have more efficient systems and access to the best handypersons and merchants. As a rule, property managers are motivated to make their buildings work with clockwork efficiency. This means that tenants’ complaints are dealt with promptly.
• Comfort and stability: A property manager’s predictability to manage a rental property means that tenants are more comfortable in the property. There are fewer of those disruptive events that force tenants not to want to renew their leases.

For tenants, living in a rental under the care of a property manager means they can have the same level of comfort they would have in their own home without looking after that home.

Hiring a property manager allows landlords to have the best of two worlds; they can enjoy the income from their investment property without sacrificing their freedom.