Owning and managing property rentals is a business irrevocably tied to the economy and the cost of goods and services. Fluctuations in the economy directly impact these businesses. Lately, inflation has been the equivalent of a migraine for property owners, directly impacting basic commodities such as labor, supplies, and services. Increasing prices for raw materials and vendor services directly impacts your bottom line. Do you increase rent to cover this? Are there services you can cut, or can you delay non-essential work?
It’s a challenging time for new landlords trying to maximize profits by managing their properties. Most don’t have the experience necessary to weather this storm without taking a significant bottom-line hit. That’s why more experienced property owners hire a professional property manager to handle the nuts and bolts of their business. Entrepreneur says, “Property management companies are always looking for smart ways to keep costs down, from utilities to building maintenance and all of the other bills in between.”
If you’re a landlord worried about rising costs and the impact on your profit margins, there has never been a better time to find a good property manager. Here’s how they can help your business.
6 Ways a Good Property Manager Can Save You Money
A good property manager is a scrappy expert in nursing a weakening bottom line or driving increased profits when the economy is strong. How do they manage this? Here are six examples.
- Increase occupancy rates
Reducing the vacancy rates across your property directly impacts your bottom line. Professional property managers offer a marketing engine and resources to get the word out about your empty units. They maximize their efficiency across the tenant screening process to quickly screen tenants and get them in place.
Property management companies simultaneously work to retain your existing tenants. A good property manager handles tenant relationships by responding quickly to any issues. When it’s time to renew the lease, they have a positive success rate of re-upping the best tenants to keep the income flowing in. - Better quality tenants
There is no bigger money loser than a bad tenant. It can be better to leave a property vacant than bring in a tenant that causes problems. A good property manager will thoroughly screen potential tenants, checking everything from credit and criminal history to employment verification, reference reviews, and much more. Because the professional property manager does this for a living, they have more experience in this area and are more likely to spot a higher risk tenant. - Reduce maintenance costs
There are often economies of scale from working with a property management company. If the firm has an in-house maintenance staff, you benefit from on-site resources to take care of your investment. Larger property management companies can get you better vendor deals because they’re handling multiple properties simultaneously. Solo property managers often fall behind in this area because they don’t have the same negotiating power. - Volume discounts on other services
Beyond lowered pricing on contractors, property management companies often have access to other discounted resources. This could include pool maintenance, cleaning companies, insurance, attorneys, landscapers, and more. Companies like Tenant Planet even offer technology that streamlines tenant payments and maintenance requests and provides property owners with an online portal to keep track of bottom-line income. This is why having a property manager is good — but having a property management company is better. - Improved rent collection
There are several benefits of having a good property manager handle rent. First, they serve as a critical buffer between you and the tenant. Second, they can approach rent collection with a clear but firm approach designed to protect your cash flow. A landlord taking the do-it-yourself approach is vulnerable to every sad story or excuse a tenant can come up with for being late on the rent check. But this is business. A professional property management company knows how to be firm and compassionate but not back down from lease enforcement.
A good property manager can also stay on top of lease renewals to maximize the retention of your best tenants. They can negotiate lease incentives that won’t break the bank while also building relationships with the tenants you really want to cultivate.
A good property management company should also offer tenants easier ways to pay than a check in the mail. For example, Tenant Planet’s software allows tenants to pay from their cell phone or from any digital device. It’s a more innovative, faster way to handle rent collections. - Fewer legal issues
A property management company is well-versed in the complex rental market regulatory environment. Failure to adhere to these ever-changing rules, especially in California, can net you fines and costly lawsuits. The best property management companies understand these rules and have attorneys available to help should a need arise.
How to Find a Good Property Management Company
You can find a good property manager that offers all of these benefits, and more. Tenant Planet is standing by to offer you our expertise, processes, and technology to cut costs and improve revenue. Our prices start at $79 a month. Call us today at 1-844-875-2638 to find out how we can help your business.
Q&A
A good property manager directly impacts your bottom line by reducing the volume of vacancies in your units. They can also improve the rent collections process by creating efficiencies and decreasing past due rents. Property management companies can negotiate better vendor rates by using these services in bulk across multiple locations. While these are just a few ways a good property manager can save you money, they are the tip of the savings iceberg.
Look for a property management team with a good track record and positive client references. Ask what tools and systems they apply to the property management process to improve rent collections or help cut costs. The property management company should know the local market and have a great network of resources to apply to your property.