According to Strategic Market Research, there are over 310,000 registered property management companies in the United States.
As a landlord in Memphis, you may be experiencing challenges managing your rental properties. Most maintenance work may be overlooked, profits may become uneven, or late payments may not be followed up.
As your real estate portfolio grows, managing your property becomes more complex. Therefore, you should consider alternative solutions, such as hiring a property management company.
Are you equipped with property management duties, or is it time to hire a company? Let’s find out below.
What’s the Role of a Property Manager?
A property manager is an expert who manages and oversees the daily operation of a property. Whether in-house or third-party, a property management company ensures the real estate investment is well-maintained and legally compliant, manages budgets, and coordinates repairs.
Property managers allow property owners to handle other obligations, diversify their portfolios, and focus on other tasks by taking up landlord responsibilities. The manager maintains the value of the rental property as it continues to generate income.
In addition, property managers play a vital role in financial reporting and management. They prepare financial reports, including occupancy rates, expense reports, and income statements, which help create a clear picture of the economic performance of the real estate investment.
What Does In-House Property Management Involve?
In-house property management means that you, as the landlord, take on apartment management duties of financial management, maintenance, and overseeing tenants. This type of management provides you with complete control over your investment. If you have the resources, property management skills, and time, in-house management can be cost-effective.
However, the workload involved in in-house property management can be overwhelming, leading to costly mistakes and burnout. As a landlord in Memphis managing your properties, you should be knowledgeable in the following areas:
- Bookkeeping and financial management
- Legal compliance and local regulations
- Repairs and maintenance management
- Leasing agreements and tenant screening
Moreover, in-house property management requires investing in training, systems, and tools to ensure compliance, quality, and efficiency. This may be costly and time-consuming, especially if you have other things to focus on.
Below are other reasons why in-house property management may not be the best option for you as a landlord in Memphis:
HR Challenges and Risks
The HR risks are a major con of having an in-house property management team. Managing an in-house team involves handling disputes, payroll, training, and recruitment.
These costs can be heavy and time-consuming, and may easily distract you from other landlord responsibilities.
Property Management Risks
Rental property management involves many risks. An in-house management crew may not be well-equipped to handle these issues effectively. Management risks can cause financial losses, operational inefficiencies, and scalability issues.
Plus, failing to monitor your in-house property management team may affect the quality and consistency of service delivery. This can, in turn, affect tenant retention and satisfaction.
Marketing Costs
The cost of marketing rental properties, mainly in-house property management, is often overlooked. Without an effective marketing strategy, attracting and retaining renters may not be easy. Marketing includes various expenses, including the following:
- Marketing knowledge that requires continuous education
- Investing in technology like engaging online content, high-quality photos, and virtual tours
- Advertising costs, like print media, social media advertising, and other channels
Third-Party Property Management
On the other hand, third-party property management involves engaging an external entity like Reedy & Company to handle the daily operations of your real estate investment. A turnkey property management company is equipped with the resources and expertise to handle various tasks, including:
- Legal compliances
- Tenant management tasks
- Property upkeep
- Rent collection
Benefits of Third-Party Property Management
With third-party property management, you’re assured of regular property income and a good landlord-tenant relationship. As an absentee property owner in Memphis, hiring a turnkey property management company simplifies your life.
Here are some pros to having professional real estate management for your investment:
Reduced Stress and Time Relief
Managing a rental property can be stressful and time-consuming. Third-party property management companies handle daily tasks, including maintenance requests, rent collection, and tenant screening. This alleviates the property owner’s burden of taking up responsibilities regarding managing their real estate investment.
Besides, third-party property managers ensure your investment complies with all federal, state, and local regulations. This saves you the time you would have spent understanding and researching existing and new legislation.
Experience and Expertise
Property management companies have vast experience and expertise in the industry. Their expert knowledge can assist you in navigating challenging issues with efficiency and confidence.
Additionally, property management companies in Memphis are knowledgeable about the local real estate markets. This helps set the right rental price that competes with other properties. By always staying ahead of your competition, you’ll attract more tenants and profit from your real estate investments.
Find High-Quality Tenants Fast
Property managers at Reedy & Company are professional networkers and marketers. Hiring a third-party property management company ensures you get qualified tenants quickly than doing it alone.
Furthermore, a property management company carries out a comprehensive tenant screening process, which includes everything you need to know, like:
- Criminal convictions
- Income and employment
- Credit checks
- Eviction history
- Landlord references
Expert property managers find renters who respect your property, pay on time, and stay for a long time. Doing this yourself or with an in-house property management crew would be legally tedious, stressful, and time-consuming.
Better Financial Reporting
Financial management and reporting in real estate are complex tasks, and not everyone can do them efficiently. By hiring a property manager, you get financial reporting on your property regardless of where you are. These professionals analyze your income and expenses to help you make informed decisions about your budgeting.
Professional bookkeeping makes it easier for you to pay taxes, split allowances, and payables. It also saves you time and money.
Efficient Communication
Electricity going off at night or plumbing issues when you least expect them are not unusual in rental properties. However, these problems can be stressful and inconvenient for you as the landlord. For this reason, you should consider hiring a property management company to ensure all tenant issues are resolved promptly.
Property managers handle all the uncomfortable conversations about late rent payments, complaints, and damage to the property. Some tenants can be challenging to deal with, but with expert property management, issues are handled professionally.
Additionally, property managers are available 24/7 to cater to the needs of tenants. This satisfies renters and increases their chances of staying longer in your property.
Ensuring Rent Is Collected on Time
Hiring a property manager means you will always have rent in your account on time. This way, you can manage your finances properly and stay on track.
Moreover, professional property management companies know how to deal with issues regarding delayed rent payments, which can be challenging to navigate by yourself. Notice periods and late payment fees depend on details such as the amount of rent owed. Professionals handle rent disputes and decide on the best action to take.
Property management companies quickly solve issues with delayed rent, and your investment gets back on track.
Expand Your Real Estate Portfolio
If you own several real estate investment properties, you know how difficult it is to market and maintain them. A property manager handles your stress, leaving you enough time to find new investment opportunities.
A property manager will assess the real estate market and find the best deals for you. They can even negotiate for a better deal upon request.
Third-party property management allows you to rent multiple properties with zero or minimal effort. They provide detailed updates on each of your properties, allowing you to stay up-to-date. With expert property managers, you can access trending news on the real estate industry, which will help you make informed investment decisions.
Factors to Consider When Choosing the Right Property Management Style That Works for You
Now that we know all about in-house and turnkey property management, how do you know which works best for you? When deciding between in-house and third-party property management, there are various factors you need to consider.
These factors include the following:
- Type and number of properties you own
- Your availability
- How much you’re willing to spend on property management
- The distance and location of your real estate investment properties
- How much time you’re eager to spend managing your properties
- Level of liability and risk you’re willing to take
If you can dedicate your money and time to managing your properties independently, you can consider in-house property management. However, if you have high standards and your properties are located far from where you live, outsourcing third-party property management companies is the best option.
Tips for Finding the Best Third-Party Property Management Company
Choosing the right property management company is one of the most critical decisions you’ll make as a property owner. A good property management firm maintains property values, controls costs, and ensures smooth operations. Making the wrong decision can lead to mismanagement, unnecessary expenses, and endless frustration.
With so many property management firms in Memphis, how do you find the right fit for your property? Below are some factors you should consider:
Great Communication Skills
Property managers talk to tenants and property owners, local government agencies, lawyers, and repair companies. A good rental property manager should be able to develop good relationships with others for smooth transactions and discussions in the future.
Organization Skills
Juggling contractors, tenants, and multiple properties requires an organized mind. Professional rental property managers keep track of repair and maintenance schedules and meticulously record their activities. They also ensure that duties such as rent collection and lease enforcement are completed on time.
Negotiation Skills
Negotiation skills are vital in property management, as property managers are expected to discuss rates with contractors and negotiate with potential tenants. A good property manager knows how to craft favorable terms while maintaining relationships and quality services.
Strong Ethical Traits
Integrity and trustworthiness are non-negotiable traits in property management. Property managers handle sensitive personal information and crucial financial transactions.
Tenants and property owners should be confident that the property management company will act in the best interests of the involved parties.
Tech-Savvy
Property management is evolving, and most tasks are handled online. A tech-savvy property manager should know about different property management software and list rental properties online. This will help them boost accuracy and efficiency and streamline operations.
Detail-Oriented
As a property owner, you’ll want to find out details on the progress of your investment from your property manager. A property manager overlooking minor information can also cause costly and significant issues.
Having a keen eye for detail when reviewing a lease agreement, inspecting a property, and scrutinizing a maintenance request prevents problems from slipping through the cracks.
Loves their Job
In property management, just like any profession, passion drives excellence. A good property manager loves what they do. They enjoy smoothing running operations, building good relationships with renters, and maintaining rental properties.
In addition, efficient property managers are willing to go out of their way to ensure tenants are satisfied and keep up with real estate industry trends. This results in superior services and an enhanced living experience.
Licensing and Insurance
Before you hire a third-party property management company, ensure they are insured and licensed. This gives you a sense of security in case anything goes wrong.
Fees and Contracts
Understanding the contracts and fees charged by property management companies is important to avoid surprises. Watch out for costs such as excessive maintenance markups, tenant placement fees, and lease renewal charges.
A good property management company should be transparent about all costs and open to discussing any issues that may seem unclear.
Choose Reedy & Company to Carry Out All Your Property Management Duties
Choosing between in-house and third-party property management is crucial to the success of your real estate investment. Research widely and consider your needs before selecting a reputable property management company in Memphis.
At Reedy & Company, we balance renters’ needs with property owners’ interests to ensure effective property management. We also have a team of professionals who work across all property sectors and provide clients with investment opportunities.
Contact us today and be relieved of all your property management duties.
