If you’re interested in buying a rental property, the cost of entry isn’t anything to sneeze at. The median home sale price in the U.S. was $416,100 in the second quarter of 2023. So, proper due diligence is necessary before pulling the trigger on a transaction.
However, not everyone wants to manage their rental property. While you might wish to own one or more rental units, enjoy the passive rental income, and monetize your investment down the road by selling it, you might want to be something other than an active landlord.
The good news is you don’t have to be. No, that doesn’t mean treating your tenants with impunity. It means hiring a property manager to find the right tenants, ensure they’re treated well, maintain the property, and do other landlord-related things.
If you already have enough to do, you might not want to add “landlord” to your to-do list. Here’s a look at three reasons why hiring a property manager makes sense for you as a rental property owner.
- Screen Tenants
A property manager can help you find good tenants who pay rent monthly, respect the rules, treat other tenants with respect, and care for their rental units. In other words, a property manager can ensure the flow of passive income is uninterrupted.
If you hand the keys to tenants who wind up costing nothing by problems, your passive income stream can dry up quickly. So, a property manager can save you money.
While hiring a property manager won’t eliminate the possibility of getting bad tenants, it will increase the odds of finding the type of tenants you want to keep around for a long time. A company like Green Residential, a Houston property management firm, will screen would-be tenants. This process involves reviewing credit scores, conducting background checks, and requesting reference letters from previous landlords.
- Provide Customer Service
After finding quality tenants, you can’t stop there. You need to work just as hard to keep them as you did to find them. That means providing great customer service and ensuring tenants can easily access you and get the help they need.
But what if you lack time to provide excellent customer service? The answer is to hire a property management firm that can do so on your behalf. The property manager can give tenants a contact number should they need help.
When tenants know that they can quickly get a hold of someone and that the service provider will respond promptly, they’ll have a higher level of satisfaction.
- Maintain Rental Property
Hiring a property manager also means getting help with maintaining your rental property. If you don’t proactively maintain the real estate, it will quickly fall into a state of disrepair. That won’t only negatively impact the value of your property, but also adversely affect tenants’ perception of you and your rental property.
Prioritizing maintenance and repairs is essential, and a property manager can help. It can spearhead maintenance and repairs by finding the right contractors, sourcing the materials, and informing tenants about projects.
You might one day want to sell your investment property to enjoy a sizeable return. But the return on investment won’t be as much as you want if your property is run down.
These are some reasons why you should hire a property manager if you buy a rental property. Don’t get hung up on the percentage of rental income these companies charge for their services. Investing in a property manager is about investing in your rental property — and the return on investment will make doing so worthwhile.