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HOW A PROPERTY MANAGEMENT COMPANY CAN HELP INCREASE YOUR RENTAL PROFITS

Appfolio Websites • Sep 23, 2019
Hiring a property management company is a significant investment for any landlord. Depending on your location and the services they provide, a property manager usually charges between 8% and 12% of the monthly rental value of the property. Some also charge an additional flat fee. This cost will undoubtedly affect the overall return on investment of your building. However, did you know that their services could also help increase your rental profits? Here are the many ways a property management company will help you maximize the income your investment property brings in.
  1. Reducing your vacancy rate
Vacancy is to be expected (and accounted for) in any rental property — the average US rental vacancy rate hovers around 7%. However, should your building sit empty for too long, your revenues will decrease rapidly while your expenses – including property taxes and mortgage – remain the same. A property management company can help reduce your property’s vacancy drastically. They advertise in all the proper channels, including some that are not accessible to the average landlord. They can also make sure that the transition process between tenants goes smoothly and quickly. Finding a new tenant is a numbers’ game that often involves showing the property to multiple potential renters before finding the right one. It is a time-consuming process, especially if you have other obligations. A company management company will have a system in place. This way, the tenant screening process, and visits go quickly to put all the chances on your side to fill the unit rapidly.

2. Choosing high-quality tenants and dealing with potential issues


The key to a profitable rental business is to find tenants that will pay the rent in full and in time while taking good care of your property. Unfortunately, as too many landlords find out too late, it is often easier said than done. A good property management company has procedures in place to screen potential tenants and systematically run a background and credit check to weed out those that may be disruptive. They often have different payment options available for the tenants to pay their rent, like a payment portal online, for example. On-time rent collection is critical to ensure a reliable income. When dealing with a property management company rather than an individual, tenants are less likely to try to play the sympathy card and find excuses. A company also has the legal knowledge and experience to deal with difficult situations like evictions professionally.
          3. Maintaining your property’s value.
Property management companies are here to keep an eye on your property even if you live far away. They will run regular inspections to make sure that everything is running smoothly and that tenants are not causing significant damages. They will also take care of all the seasonal maintenance the landlord may not be aware off, from landscaping to snow removal if necessary. Besides, they have the required professional connections to make sure that the contractors hired for potential repairs are reliable. You can rest easy knowing that, not only your property will be taken care of, but that it also will be done right.

          4. Protecting you legally
Property management companies are familiar with the local laws and regulations related to renting and building safety. They will help you stay clear of potentially expensive lawsuits that could haunt you for years on hand. From lease agreements to property code and tenant relationship, they will ensure that your building is safe and your interests secure. They can help you draft a foolproof lease. They will also help you get rid of undesirable tenants quickly and professionally, staying clear of these horror stories you may have heard about. A property management company can also help you with your taxes related to your rental property. It could potentially save you a lot of fiscal woes if you are not familiar with the particulars of deductions and write-offs.

         5. Monitoring rental rate trends
Deciding on the monthly rent for your property building is a tricky business. If it’s too high, your building may stay vacant, and you could lose a lot of money. If it’s too low, you will have issues covering your expenses and your rental profits will be lower than what you should get. There is no secret recipe for establishing the perfect rental rate. You need to continually monitor your competition and keep an ear to the ground to be aware of any changes. Real estate is, by nature, a fragmented market. If you don’t live locally, or if real estate is not your main activity, you may have issues deciding on how much you should charge your tenants. A property management company can help you with that.

         6. Improving your real estate investment portfolio 

A good property management company keeps up with the real estate investment trends. They often have privileged access to information. It could include interesting properties coming up on the market soon, or how you could optimize your investment portfolio to compensate for an asset which isn’t performing well. Not only do they take care of your present interests, but they also help you prepare for the future. Hiring a property management company also allows you to invest in remote properties: even if can’t oversee the daily operations, you can still take advantage of a booming market if it presents itself.
       7. Maximize your free time
Last but not least, hiring a property management company is the best way to take a hands-off approach to real estate investing. Knowing all there is to know about a property and managing the daily running operations is time-consuming. You need to educate yourself about the latest real estate trends, screen tenants, collect rent, and dealing with routine maintenance, among other tasks. You may have a day job which keeps you busy, or a family you want to spend time with. You may want to travel the world without having to worry about a phone call from one of your tenants about a broken furnace. Either way, time is money, and dealing with the nitty-gritty of property management may not be the best use of yours.

If you would like to know more about what we can offer you to maximize your rental profits, check out our website. We are always happy to answer any question you may have.

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Real Estate Investing for Beginners: Tips and Strategies to Get Started in Huntsville, AL

By Easton Farr • 16 Jun, 2023
Real estate investing can be a great way to build long-term wealth and generate passive income, but it can also be a daunting process for beginners. If you're considering real estate investing in Huntsville, AL, here are some tips and strategies to help you get started.

Maximizing Your Rental Income: Tips for Setting the Right Rent Price in Huntsville, AL

By Easton Farr • 28 May, 2023
One of the biggest challenges that landlords face is setting the right rent price for their rental properties. Setting the rent too high can lead to long vacancy periods, while setting the rent too low can result in missed revenue opportunities. In this post, we'll explore tips for setting the right rent price and maximizing your rental income in Huntsville, AL. Do Your Research Before setting the rent price for your rental property in Huntsville, AL, it's important to do your research. Research the local market and check the rents for similar properties in your area. You can also use online rental pricing tools or consult with a local real estate agent to get a better sense of the market rates. Consider the Property's Features and Amenities The features and amenities of your rental property can also affect the rent price. Properties with updated appliances, modern finishes, and desirable amenities like a pool or gym tend to command higher rents. Additionally, consider the location and proximity to schools, shopping, and public transportation, which can also impact the rent price. Factor in Operating Expenses When setting the rent price for your rental property in Huntsville, AL, it's important to factor in the operating expenses. These include utilities, maintenance and repairs, property taxes, insurance, and property management fees. Subtracting the operating expenses from the potential rental income can help you determine the maximum rent price that you can charge. Look at Your Competitors Look at what your competitors are charging for similar properties in Huntsville, AL. If your rent price is significantly higher than theirs, you may have trouble finding tenants. If it's significantly lower, you may be missing out on potential rental income. Keep in mind that pricing may vary based on the location, features, and amenities of your property. Consult with a Property Management Company Setting the right rent price and maximizing your rental income can be a complex process. Working with a property management company in Huntsville, can help you navigate the process and ensure that your rental property is priced competitively. A property management company can provide market analysis, advise on rent price adjustments, and handle rent collection, freeing up your time and making real estate investing a more passive investment. In conclusion, setting the right rent price for your rental property in Huntsville, AL requires careful research, consideration of the property's features and amenities, and an understanding of the operating expenses. Additionally, consulting with a property management company can help you maximize your rental income and ensure that your property is priced competitively. If you're looking for expert guidance and support in managing your rental property in Huntsville, AL, contact RCPM for assistance

How to Choose the Right Rental Property

By Easton Farr • 13 May, 2023
I want to buy a rental property... but what do I do now?
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