Advantages Of A Property Management Company?
What are the advantages and disadvantages to property owners? My family has many properties, as well as a management company. I'm looking to start investing myself, and am considering opening a management company as well. Your insight would be greatly appreciated!
The advantages are that an owner doesn't have to spend time dealing with tenants'issues(screening, fill vacancy, eviction)especially with if you have many properties local or out-of-state.
IF you can provide good, professional and honest services, more business will come.
Hi Kim,
I think I can provide a "both sides of the fence" view here. Let's get the negatives out of the way first. First thing to remember is that Property Management is in the direct line of fire with the tenant. People skills are essential as well as looking out for the property , adherence to the lease and the over all laws governing the property in question. Next, it is a day to day job. As the manager you're responsible for direct contact with the tenants on thier schedule, with whatever the lease allows. And most important, problems, emergencies, troublesome tenants are your responsibility. Being politically savy and a troubleshooter are valuable tools. On the positive side, most serious investors don't want to property manage. It takes away from the time they can spend investing. So, there's a good market out there for PM's. And there is money to be made. I think the average fee is 10% of a given leases rent. Also additional charges can be added for repairs, finding new tenants, general maintenance and upkeep, not to mention eviction procedures.. And though it's a "day to day" operation, it ebbs and flows. There can be surprisingly long down times when you simply collect your fees.
I hope that helps and good luck
Ben B.
I have 8 row style properties in the Phila PA city area. Can anyone recommend 2-3 good property management companies to consider?
Thx
KimInAustin,
I don't really get the question. There are several advantages and disadvantages to having a PM but I'm not sure how that would help you determine whether or not to be a PM. Regardless, I will tell you why I have a PM. I don't like sitting in an office collecting rents, interviewing potential tenants, making calls to tenants who haven't paid their rent, putting out signs , taking down signs, inspecting properties, going to court, making arrangements for repairs and paying subs, and that's just my personal reasons, do I need to go on? I like to get my checks in the mail and go about my business. I'm sure you could make some money as a PM, but you would have to enjoy it or you would be putting yourself through a lot of stress for not much money.
Advantages:
Owners can focus time on investing, not managing. I won't list all the tasks involved in property management, but there are many.
Disadvantages:
It cost the owner money to pay for this service.
Do you have your real estate license? I have recently opened a property management company and learned that you need an active real estate liscense in Texas before you can show and lease property for other owners. It doens't take that long to get a license but the tricky part is finding a broker to sponsor you so your business can begin.
What are the advantages of using a Property Management Company
? They:
Collect the rent.
Take the calls from the tenant.
Arrange for repairs.
See that the repairs are done properly.
Send appropriate notices to the tenant for late or nonpayment of rent, violations of the rules, etc.
Do or oversee evictions.
Get your approval for major expenses.
Inspect the property occasionally.
Provide you with an accounting of all money received and disbursed monthly or quarterly, as well as keep a client trust account for owner money. State law regulates property managers much as it does real estate agents. And every state is different.
And whatever else you agree upon between you. In fact every responsibility of the property manager is agreed upon contractually.
Hey,
If you look back on the first question, this thread is kind of strange. A person might want to start a PM company and wants to know the advantages to the property owners of a PM. Your family has properties and owns a PM, wouldn't you just ask them??? Secondly, I would not think about starting a PM unless I had a LOT of experience in RE (which you might) and a great deal of time to devote to establishing the business. Basically there are several large PM companies, but lots and lots of RE agents/brokers do it on the side, so you have a lot of competition.
The advantages and disadvantages depending on who you ask. The list of items handled by a PM is huge, but the truth is they must likely spend an average of 1.5 hour per month per house. Things like evictions and chasing late payments do NOT happen with any great frequency and if they do, the PM is not doing their job correctly anyway.
I wasn't sure from your original post if you were going to manage just your own properties or take on other investors properties. Anyway....
If you are the investor and will be managing your own properties, no RE license is required. If you are managing other investors properties, then yes you need to check with your states RE commission on what the licensing requirements would be for your state.
Quote:
On 2004-08-27 09:13, rdjames wrote:
Do you have your real estate license? I have recently opened a property management company and learned that you need an active real estate liscense in Texas before you can show and lease property for other owners. It doens't take that long to get a license but the tricky part is finding a broker to sponsor you so your business can begin.