There is a common misconception among real estate investors…
The following article has been provided by RCN Capital.
A common misconception for real estate investors is that this profession is an individual endeavor. Co-workers, colleagues, and teamwork don’t always come to the forefront of an investor’s mind, but these relationships do exist in the industry, and they are vital to success. Whether it’s a partner with funding, a general contractor you can trust or a real estate agent that can provide strong leads on a regular basis, this business is near impossible to navigate alone. An underrated professional relationship that any investor should be capitalizing on is one with a property manager. Property managers can alleviate stress and bring a set of skills to the table that are very valuable to investors, especially when it comes to multifamily properties. Here are a few of the key factors that make property managers a must-have for investors looking to scale their business.
Tenant screening
Managing tenants is a major aspect of a property manager’s job, but even before that, screening potential tenants and ensuring the right type of tenant is allowed to rent out a unit in a multifamily property is an often-overlooked skill. Property managers bring a cache of knowledge to the table that an investor can lean on when it comes to finding tenants.
There are a number of different checks that can come into play that can ensure your property is getting the right tenants. Applications, background checks, security deposit requirements and even interviews can all be parts of a thorough process that property managers will employ. These tactics may seem tedious but it’s necessary for investors to understand the process of a property manager. Securing the right kind of tenants can allow an investor to put their mind at ease and focus on securing other investment properties rather than tasks that keep them attached to one property. Finding the right tenants to rent out a multifamily property can take weeks or even months. Because of this, it’s crucial that investors can delegate that responsibility to a property manager.
Tenant retention
Any investor will tell you that the pivotal piece of finding and keeping a multifamily investment property in their portfolio is tenant retention. Cash flow is paramount for investment properties and multifamily investments are certainly the biggest example of that. Having a property manager be the face of your investment property could be the difference between a cash-flowing property versus an underperforming one. The property manager can always greet tenants with a smile when seeing them on property, fix any problems that come up in an expeditious fashion, and can even be impactful by just listening to tenants and working towards fixing or changing any issues or requests they have with the property as it currently stands.
Experienced property managers have probably seen just about everything that could happen to a property over time due to wear and tear or poor tenants. Their role in keeping those tenants content and performing consistent maintenance work that shows they take pride in managing the property will trickle down to the tenants that are paying rent. If an investor’s tenants see that presence on a consistent basis, not only will they be more apt to look after the property on their own but will also want to stick around for years and avoid looking to move out. Moving is sometimes essential but usually very annoying so tenants will try to avoid that process at all costs. A property manager that cares for the property and the tenants alike will attract tenants to stay longer and make more money for investors.
Higher level of customer service for tenants
Once the tenants are screened, secured, and content with living on the property, the next step is the tenant management process throughout the course of their lease. Having a property manager or property management team on site or near the multifamily investment property is a luxury for an investor. This way, they can have a presence on the property and always be nearby if the tenants need something repaired or checked out. Building that rapport is necessary, but so is fixing and maintaining the property in a timely fashion.
With an investor trying to do this without a property manager, the process becomes drawn out, and difficult for tenants to get answers. They are playing a waiting game and worried about a third-party company coming into their home and fixing something. However, with a property manager, they are there quickly to diagnose the issue and may even fix it themselves. If not, they are at least making the calls to other companies and ensuring that the tenant is kept up to date on what is happening and when the problem will be resolved. With the level of customer service and availability that can be provided by a property manager, it is clearly the right move for handling any multifamily property that an investor may have.
Time and time again investors can burn themselves out when they try to do everything by themselves in this industry. It can be grueling days and long nights that end up deterring the investor from staying committed and staying in the industry. Investors must not let pride or ego get in the way and seek out help, advice, or connections anywhere they can to maintain success in the investment space. Property management companies have become so popular because they make the lives of investors that much easier. Investors can focus on securing more properties for their portfolio knowing that the property management company has everything covered elsewhere. As an investor, be ready to delegate responsibilities and expand your business. There are many other pros to having a property management company tend to a multifamily property, but these alone will make a noticeable positive impact for investors.
