If you’re like many of our clients, you’ve probably thought long and hard about whether to hire a property manager, but you’re not sure if you can justify the expense. In today’s blog post, we’ll discuss some ways a competent property manager can increase your profits and improve the value of your investment.
Navigating Landlord-Tenant Laws
Understanding landlord-tenant laws in your local market is absolutely critical as you build up your rental property portfolio. Failing to understand these laws and restrictions could cost you in the form of legal fees, headache tenants, or fines. Hiring a Fort Lauderdale property management company that understands these laws can save you enormously. If your property manager can save you the trouble of going through just one eviction, then you’ve probably already saved enough money to justify a year’s worth of property management expenses!
Responding to Emergencies
When we say “emergencies,” we’re not just talking about minor emergencies like a toilet backing up. While it’s important for your property manager to have systems in place to respond to these kinds of emergencies quickly and effectively, the real test is how he responds to a large scale emergency like a natural or manmade disaster. In a place like South Florida, where hurricanes are not uncommon, this should be a serious consideration. If you find your rental property on the receiving end of a natural disaster, you’ll be glad to have a good property manager who can save you money by negotiating insurance claims, hiring contractors to do the repair work at a reasonable rate of pay, and, if necessary, negotiating discounts for temporary housing for your tenant. If you don’t have a property management company, then you should ask yourself, “What systems do I have in place to protect my myself and my tenant in a worst case scenario? Can I handle this better than a professional property management company?”
Screening Tenants and Collecting Rent
One of the quickest ways to kill the profitability of your rental property is to approve the wrong tenant. You want a tenant who pays rent on time, will stick around for the duration of the lease, and isn’t going to cause trouble in other ways (disturbing neighbors, filing frivolous law suits, etc.). One of the most common mistakes we see is compromising on the quality of the tenant in order to fill a vacancy. In the long run, this is a losing strategy. The best property management companies will know where and how to advertise (and they might even have a stack of qualified applicants on a waitlist) your rental listing, and they know exactly what to look for in an applicant. At Mayfair Property Management, our process includes an initial screening, a credit check, a criminal background check, an income/employment verification, residence history, and a social media screening.
Once the tenant has moved in, your property management company should have a good procedure in place to collect rent. It should be easy for your tenant to make a payment (we find that online payments work best), and there should be a zero tolerance policy for late payment. Most importantly, this zero tolerance policy must be supported by action. It is not enough to say there will be consequences for late payment—there must be actual consequences.
Maximize Rent by Monitoring the Market and Maintaining your Property
Let’s be honest, when it comes to increasing rents to ensure rental rates are in-line with the market, some rental property owners are more diligent than others. We all know someone who’s been living in the same house for five years because his landlord has never raised the rent. Your Fort Lauderdale property management company should regularly review rental rates in your market to make sure your rental is commanding the best price. As the middle man between you and your tenant, it’s also easier for the property manager to break the news to your tenant.
At the same time, a good property manager will keep your property looking nice and stay ahead (as best as possible) of any maintenance issues that threaten to arise. When the time comes, this makes it easier to justify rent increases to your tenant. On the other hand, if you don’t keep your property looking nice and stay on top of maintenance work, you’re giving your tenant a good reason to leave when you try to increase the rent.
Hiring a competent property manager to manage your Fort Lauderdale rental property is one of the smartest investment decisions you can make, especially if you’re a new investor or you don’t have the time nor inclination to treat property management as a profession. If you’d like to learn more about the services we offer, we’d be happy to talk to you any time.