Skip to content

What Do Property Management Companies Do? Part One

One of the most frequently searched terms on Google, Bing, Yahoo and other search engines on the topic of property management is simply: “What do property management companies do?”

To answer that question, we have put together a five-part blog series to explain exactly what property managers do (and don’t do) to effectively maximize rental property.

1)  Find and place the right tenant

Many would-be real estate investors fail to jump with both feet into the rental market because they aren’t convinced they can find a consistent, respectful, and on-time tenant for their rentals. They fear they will put significant dollars on the line, only to own a property they can’t fill.

Not to sound pessimistic, but this is a legitimate fear; it happens. Of all the services a property management company provides, this often proves to be the most valuable, and the key to garnering confidence of rental property owners long-term. Good property management companies effectively perform the following services to make this happen:

  • Market your property. Companies simply have the networks, connections, and resources that individuals typically do not. They know which directions are worth going in, which ones aren’t, and have the time and ‘teeth’ to push that direction effectively. Solo rental owners often have to resort to unreliable, risky methods to hopefully get their property in front of legitimate prospects. Keyword: hopefully.
  • Show the property. For those who get past hurdle one, hurdle two can be just as difficult. Most rental property owners have full-time careers and families, and often complain that one of the hardest parts of ownership is having to meet with prospective tenants on the tenants’ timetable, rather than their own. Management companies do this for a living…so meeting a tenant at 2:30 on a Wednesday isn’t a problem.
  • Screen the applicants.  Referring back to the original problem of finding reliable tenants, screening applicants often proves more difficult than anticipated for individuals. To put it bluntly, without the resources and professionalism of a management firm backing an interview or application, avoiding troublesome or inconsistent renters is nearly impossible.

Read Part Two

For our loyal clients, and our future ones

RPM East Valley

 

7 Real Estate Tips for New Investors: Tip 7

Tip 7:  Do What You Can To Help Others

 

This might be the most important of the seven tips.

We have come to believe that business is simply dog-eat-dog, survival of the fittest, and a race to the top. Although there are certainly people who ‘win’ that race, the large majority of those who succeed in real estate do so by making friends and serving their friends and community along the way.

Many landlords are just waiting for a tenant to make a mistake, so they can apply a fine and collect on it. Sure, that garners some extra short-term cash, but destroys a relationship that could not only have continued, but could have connected you to new clients if feelings were mutually favorable.

Our final suggestion and recommendation to you is to be friendly, honest, and good-willed along the way. Most of us dislike the cutthroat nature of many industries, and although real estate is certainly competitive, it doesn’t have to be nasty.

Serving those that serve (or pay) you will always provide a better outcome in the end.

Read Tip 6

For our loyal clients, and our future ones

RPM East Valley

7 Real Estate Tips for New Investors: Tip 6

Tip 6: Rent

Rental properties are statistically the most common type of real estate investing in the United States. The primary reason for this is simplicity: the process and outcomes of renting are straightforward, and don’t require large amounts of hoop-jumping or complexities.

In addition to being so simple, rentals are stable and generate steady monthly income. Owners of rental properties often do so to generate increased cash flow, something that comes and goes in other real estate ventures.

By holding on to rentals for longer periods of time, overall property values tend to rise. Although rental properties do require landlord maintenance, very few properties are worth less now than they were worth ten years ago, much less twenty.

Rentals are typically in very high demand, regardless of the market. There will always be plenty of households and families that are looking to rent because they cannot afford to buy. If the economy strengthens, the average household will be able to rent at higher rates. If the economy worsens, more households will turn to renting as opposed to more expensive arrangements.

Finally, tax incentives exist for rental investors. In many states, rental owners are able to write off interest payments on mortgages.

Read Tip 5                                              Read Tip 7

For our loyal clients, and our future ones

RPM East Valley

7 Real Estate Tips for New Investors: Tip 5

Tip 5:  Identify Hidden Assets

“An asset is something that puts money in your pocket”

-Robert Kiyosaki, author of Rich Dad, Poor Dad

Often the first stumbling block people cite that prevents them from investing in real estate is cash flow. They say something to the effect of “I’d love to do that, but I don’t have the money.” They may be accurate in that the money may not be sitting in their bank account, but that doesn’t necessarily mean that they don’t have it…

What people don’t realize is they have assets: home equity, IRAs, 401Ks, etc. These are common starting points, but to be frank, they’re rather weak. ‘Low yield’, as economists would term them.

Real estate is high yield, where positive returns are not only exponential, but much more direct and immediate. This scares people into thinking the risk is too high and they back off, staying with their current, yet ultimately inadequate, earnings.

A great starting point is to simply write out all of your assets. Keyword: all. Writing ‘paycheck’ without ‘401K’ is incomplete. Same goes for home equity.

Read Tip 4                                             Read Tip 6

For our loyal clients, and our future ones

RPM East Valley