In real estate, as with most investments, you want to maximize your profit margin. Typically we think of maximizing profits by reducing expenses, and increasing income. Buy low, sell high – or, in this case – rent high. So it might sound counter-intuitive that adding on the expense of paying a property management company would help you to make more money than hiring an individual or managing the property yourself.
Getting the best return on investment from your property as a rental means, 1) renting the property at the highest local market value; 2) Keeping the unit occupied; and, 3) reducing your expenses overall. Here are ten benefits to contracting an experienced property management firm.
You will want to rent your unit at the highest price possible.
1. Local market value
Getting the highest rental price is based on the local market value for the location and the size and style of the property. An astute company will conduct studies of the local market and will ask – and get – the best price for your property.
2. Maintain high standards
Additionally, you will need to maintain your property to the highest standard. The firm representing your property can advise you regarding any upgrades that you can make to increase your property’s rental value. Regular maintenance checks will ensure that everything is kept up-to-date and in tip-top working order.
…without ever having long periods of vacancy.
3. Keep the unit occupied
Keeping your unit occupied, whether as a long-term rental or as a vacation rental, can be a full-time job unto itself. If you already have – or would like to have- more than one rental income property, then there will not be enough of you to go around. If you want to reduce your financial exposure, then you will need to increase your ‘property’s exposure….
4. Increase exposure
A profitable property management company will have a well-outfitted website and marketing team. They will have strategically-placed advertising. Your property will be displayed to highlight its greatest attributes and in the most relevant segments of the market. It is easier for a production company to gain international exposure than it is for an individual. Some of the larger companies even have apps to simplify the experience for both renters and contracted owners. Increased market exposure means your unit is less likely to stay vacant. Consistent occupancy rate = consistent income.
5. Guest/tenant satisfaction
Not every investor is a “people person.” The truth is that we ‘aren’t all cut out to be customer service agents. It’s hard work dealing with demanding people day in and day out. However, tenant satisfaction and conflict resolution is par for the course for property management experts. It is their goal to decrease turnover in long-term rentals and increase return/referral clientele in vacation rentals. After all, the goal is consistent occupancy.
6. Concierge services
Excellent tenant/guest satisfaction means being available 24/7. ‘It’s not likely that you chose to go into the real estate business because you wanted a job working on-call. Also, you definitely don’t want your guests to wait for help if they get locked out of their unit; or if there is a plumbing incident in the middle of the night. Or even harder scenarios, like you being out of town. Having a property management team means that someone will always be available to satisfy your ‘guests’ needs. On the lighter side, they can also advise guests regarding local sights, services, and attractions to help make their stay more comfortable or enjoyable.
Time is money. Make the most of your time by reducing your workload.
7. Payment collection
Your time is valuable. So you want to get paid. Resoundingly, the most common complaints that landlords have regarding their tenants have to do with collecting payments. You can save yourself loads of grief by having a property manager handle payment collection for you. What’s more, is they may have sophisticated systems in place that ease the payment collection process for both tenants and owners. When payments are not missed to you, then you won’t miss making payments either. Win-win.
8. Tenancy applications
Getting “good” tenants in a long-term rental unit can be tricky and tedious. You don’t want an extended vacancy, but you also ‘don’t want to risk having tenants who ‘can’t afford the rent in the long run. Nor tenants who might damage the property. Homeowners can also be easily subjected to emotional decision-making that is not in their financial best interest. A property manager will look at a potential tenant with objectivity and perform any needed background checks, rental history, and job or income verification. For vacation rentals, managers/owners often can rate and read reviews of guests before approving their rental.
9. Vendor relationships
Every home requires regular maintenance and upkeep, and sometimes even repairs. Property management companies can relieve you of the daunting task of finding skilled, honest, and dependable maintenance workers, repairmen, contractors or other suppliers to address any issues that may arise. Many companies have workers under contract. Others have a list of vendors that they regularly use. Either way, their ongoing relationship with these contractors means that they will probably get a better rate than you will as an individual. Hiring a property manager will save you money by getting you the best deal on the work that’s necessary, and by making sure that the suppliers do their job right.
10. Laws and regulations
Laws regarding real estate and rental properties are sometimes complicated and can change periodically. If you are a foreign investor, then there may be an additional layer of regulations to follow. Navigating real estate and property law in a foreign language can be particularly challenging – and expensive – if you don’t fully understand how to abide. A property manager can keep you up to date and help you to navigate the local laws, potentially saving you loads in fees and potential fines.
Hire a Property Management Company
Successfully managing a rental property is not a simple task. It takes a great deal of time and a great deal of energy. If you are not prepared or available to invest yourself into it full-time and then some, then you may not get the return on your investment that you had anticipated. We highly recommend hiring a professional team to manage your property. Sometimes you need to spend a little money to make a lot more.
Top Mexico Master Broker has a variety of developments that are ideal to generate extra income through vacation rentals like Nuuch Allure. Numerous real estate projects already include property management services, however, in The Riviera Maya, there are several companies experts on this subject.