You recently ventured into the world of rental property by purchasing a single-family investment property. You're already overwhelmed by marketing, tenant screening, lease agreements, and maintenance issues, and you're considering hiring a property management service. Not only will a property manager take over all those tasks, but he or she will perform the all-important task of collecting rent, which not only relieves you of that headache and puts money in your pocket, but it will help preserve the landlord-tenant relationship.
Collecting Rent on your Property
Collecting rent on your property is the reason you invested in rental property, but it's not as simple as asking tenants to put a check in the mail each month. You first need to determine how much to rent your property for. You'll need to research the area for similar properties to determine an appropriate rental amount. Then you'll need to screen prospective tenants and perform a background check to evaluate their ability and likelihood that they will keep up with the payments. If they don't, you'll need to take measures to collect or begin eviction proceedings.
You'll need to write up a rental agreement that outlines the terms of the lease: security deposit, when the rent is due, when a payment is considered late, and what actions will be taken for late payments.
You'll also have to agree on how your renters will pay each month. It's wise to not have them bring the payment to your home, and you may not even want them to know your home address. Will you set up a rent drop box or use a third-party rent collection agency? Do they want to pay online or have payments automatically deducted from their bank account? Who will be responsible for record keeping and sending rent receipts? How will you handle disputes so that it doesn't harm your landlord-tenant relationship? When can you periodically raise the rent without risking an empty rental?
That's a lot to consider for simply putting a rent check in your pocket each month. That's why hiring a property manager can be well worth the expense.
Benefits of Using a Property Manager
Property managers do much more than keep your investment safe and well-maintained, and one of the most important tasks they can take off your hands is collecting rent payments each month. In addition, they have set policies for ensuring prospective renters are qualified. They also know how to determine an appropriate rental amount and the best methods for collecting. They will take care of receipts and record keeping, handle rent disputes, and be firm when your tenants ask for additional time to pay.
Don't let your foray into the world of investment property lead you down a path filled with hassles and headaches. Let property management deal with those, while you reap the rewards of being a landlord.
This website can serve as your home for information about real estate. Here, you will find articles about the buying process and others on the selling process. We've also included content related to getting a mortgage, finding a real estate agent, and scheduling an inspection. We hope that by addressing all aspects of the real estate world, we will make you better prepared to handle any real estate transactions that might be in your future. After all, real estate can be a really smart investment, but only if you buy the right home and know how much to offer. Start reading, and enjoy what you find.