Owning a residential rental property can be a great way to bring in additional income. What you might not be prepared for are all of the hidden costs that come with this. You might think that hiring on a property management firm is just an additional expense, but this can actually save you money in the long run. Here are four types of savings that a property management firm can pass onto you.
1. Vetting the Right Tenants
Getting the wrong renters in your rental unit can end up costing you a fortune in the long run. Damages over time, home repairs needed that aren't reported, and late rent payments all can add to your expenses and take away from any income a property might have be able to provide. Property managers can start with the right tenants from day one with credit checks, references, and interviews that owners might not have the time or resources to do correctly.
2. Relationships With Repair Professionals
Your rental properties might run into emergency and routine repair needs over time. A property management firm will have relationships with repair specialists that are known to do quality work. Property management firms will bring additional business to repair professionals, so they can often get a better deal than one-time customers.
3. You Can Focus on Other Ventures
While you might want to handle all of your investments on your own, this can get out of control if residential units aren't your only business. Managing properties might just add stress to your daily life and cut into other business ventures your efforts might be better spent pursuing. Don't lose income because you don't have the time to focus on your day job; instead, have a property management team help with the day-to-day renter-related issues.
4. Documentation and Collections
It can be hard to keep all of the backup information you need when it comes to your rental properties. This includes rent records, walkthrough documentation, and any continued correspondence with renters. This will save you money if there is a dispute down the line or during a move out that calls for any paper trail, especially if you are being challenged on holding a deposit for good reason.
While owning a rental property can be a great way to make passive income in theory, this can come with its own challenges as well. If you aren't up for all of the work that goes into being a full time landlord, a property management firm can take this over. Over time, having property management in place can save you money by efficiently managing your rental. For more information on property management, contact a company like Management Associates.