Owning a rental property can be a rewarding investment, assuming you have excellent tenants who take great care of your property. When everything is going great, a rental property can provide you with a steady passive income and the chance to further your investments.
However, if you’re not as excited about taking an active role in the management of the property, or if you have a needy tenant, this can lead to a lot of time spent working instead.
Property management companies are easy to find. Kingston has quite a few reputable ones that can take away the labour that goes into being a landlord. Especially if you own multiple properties, you’ll likely find that passing over the reigns to an experienced property manager is worth the extra cost and will actually save you time and money in the long run.
Some other great benefits of hiring a property management company include:
These companies often have intensive tenant screening abilities that ensure the right people are moving into your rental, which will also save a lot of heartaches – and money in your wallet – down the road.
They often employ skilled tradespeople who can make fixes and repairs without needing to pay a professional to come in and do it.
They handle the legal side of dealing with tenants, such as leases, evictions, municipal law, inspections, negotiations, etc. It may not seem like it, but a lot of paperwork and legal knowledge goes into properly maintaining a rental property. Having someone with the right know-how on your team can save you a nasty lawsuit.
Using a property manager can help shorten the vacancy gap in your rental. You’re more likely to find a new tenant, and one more likely to stay long-term, when a management company is using their resources to find someone.
- Collecting rent is their strong suit and they know how to talk and negotiate with tenants to get rent paid on time. Often they’ll also do other accounting work as well such as paying taxes.
When shouldn’t you use a property management company?
Before you think all we do is sing the praises of property managers, there are certain situations when hiring a property management company may not be in your best interests.
First, if you’ve purchased your rental property and intend to make it the majority of your income it might be best to take on an active management and landlord role. Not only will this save you the commission paid to management companies (usually around 10 percent of the rent), but it will provide you with a way to maximize the reward you receive from your property.
Also, not all management companies are amazing. Some of them can be quite difficult to work with. It’s important to have an open and communicative relationship with your property manager. If you find they aren’t sending you documents on time, are being less than friendly with tenants, or other dodgy activity, it would be in the best interest of your property and you to just do it yourself. Or move on to another company.
Also, if your rental is small with only one or two good, permanent tenants who have lived or will live at the property for many years, you may discover you’re only paying money to a management company who simply just collects the rent. You could do that too.
Sometimes, for tax reasons, rental property owners are legally not able to manage their own properties because they’ve classified the investment as passive income. In these situations it’s important to hire a property manager, but it doesn’t necessarily mean it needs to be an incorporated company. Look into your options.
All in all, property management companies can be a great way of passively making an income while having a team of experts do the heavier work for you. Look into your own situation – don’t make the decision lightly. Be sure as well to interview more than one company to find someone or a team that is going to work best for your situation.