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  • When Should a Landlord Hire a Property Management Company? Hiring a property management company can be great for your business, or not.

    What Does a Property Management Company Do?

    Management companies deal directly with prospects and tenants, saving you time and worry over marketing your rentals, collecting rent, handling maintenance and repair issues, responding to tenant complaints, and even pursuing evictions. Plus, a good management company brings its know-how and experience to your property, giving you the peace of mind that comes with knowing your investment is in good hands. Finally, a management company is an independent contractor, so you avoid the hassles of being an employer.

    When Should You Hire a Property Management Company?

    Although hiring a property management company has many advantages, using one can be expensive. And, even apart from the cost, relying on a property management company is not for everyone. Consider the following factors to determine if hiring a property management company would be a good decision for your business.

    You should consider hiring a property management company if:

    You have lots of properties or rental units. The more rental properties you own and the more units they contain, the more you're likely to benefit from a management company.

    You don't live near your rental property. If your rental property is located far from where you live, hiring a property management company can be invaluable in dealing with the many issues that you will not be able to handle from afar.

    You're not interested in hands-on management. Many landlords look forward to the challenge of finding good tenants and the rewards of maintaining a safe and attractive property on their own. But if you view rental property ownership strictly as an investment and want little or nothing to do with the day-to-day management of your properties, consider hiring help to manage your property.

    Your time is limited. Even if you enjoy hands-on management, you may not have much time to devote to your business, especially if landlording isn't your day job. And if you prefer to spend your time growing your business, including searching for new properties, arranging financing for renovations, or changing your business structure, then a management company may be a good way to spend your money.

    You can afford the cost. Hiring a property management company is an attractive option if you can afford the fees. When interviewing companies, expect to hear quotes ranging between 5% and 10% of what you collect in rent revenue. If it's a down market and you're able to manage things yourself (or with the help of a resident manager or other employees), you may want to keep doing so until the market turns around.

    You're suddenly inundated with management tasks. If your business is growing, at some point you may find that you need a substrantial amount of help to manage everything properly. At that point, it might make sense to hire a management company.

    You don't want to be an employer. If you hire a resident manager or other employees to help with your property, you become an employer. You'll have to handle payroll and deal with a host of other legal requirements and considerations. But, because a property management company isn't your employee (it's an independent contractor), and neither are the people who work for the company, by using one you avoid the hassles of being an employer.

    Your property is part of an affordable housing program. If you participate in an affordable housing program, things can get complicated. Usually, in these programs the landlord receives financial assistance, which may be in the form of a grant, low-interest loan, or tax credits, in return for agreeing to rent at least part of the property to tenants earning below a certain income level. In order to continue receiving the assistance, the landlord must comply with a complicated set of rules. With so much at stake, it's often worth hiring a property management company that has expertise and experience with the particular housing program in question.

  • Four Reasons Renters Insurance Should Be Compulsory for Your Property


    Four Reasons Renters Insurance Should Be Compulsory for Your Property

    Most landlords, property managers and real estate professionals probably understand the value of landlord insurance. However, many communities still don’t require every resident to provide proof of renter’s insurance. Things are improving. Between 2011 and 2012, the percentage of landlords/property managers who require self-paid insurance rose almost 15 percent, from 62 to 84 percent. According to the National Multi Housing Council’s 2012 Apartment Cost Risk Survey, almost 85% of respondents claimed they stipulate coverage as a lease requirement. The number is less impressive when you consider that 4 out of 10 people who claimed they required residents to purchase coverage didn’t have a standard that covered all properties.

    It wouldn’t make sense to skip your landlord insurance, or fail to renew those riders that protect you against fire, wind, floods and other “normally excluded” acts of God.

    Why would you leave yourself open to losses when it isn’t necessary? Recovering losses is arduous at best. In 2013, Scott Woodward, risk manager for Dallas-based Trammell Crow Residential, told Multifamily Executive Magazine the odds are about 1:50 of collecting on a lien filed about tenancy ends.

    If you’re still among the shrinking pool of property managers who don’t require renter’s insurance, here are four reasons you should rethink your plan.

  • Is It Time To Hire A Property Manager?

    Is It Time To Hire A Property Manager?

    Deciding whether you should hire a professional to manage your rental property doesn’t have to be an agonizing decision. It really just depends on your own needs and expectations. Some folks manage their own properties without any stress, while others find it to be quite a headache. One thing is for sure: to successfully manage properties efficiently, time and energy are essential. Do you have what it takes, or should you hire a pro?

  • FAQ about Home Buying

    1. What type of home best suits your needs? 
      You have several options when purchasing a residential property: a traditional single-family home, a townhouse, a condo, or a multi-family building with two to four units. Each option has its pros and cons, depending on your homeownership goals, so you need to decide which type of property will help you reach those goals. You can also save on the purchase price in any category by choosing a fixer-upper, although the amount of time, sweat equity and money involved to turn a fixer-upper into your dream home might be much more than you bargained for. (To examine your options, check out Does Condo Life Suit You? and Is A Housing Co-op Right For You?)

    2. What specific features will your ideal home have? 
      While it's good to retain some flexibility in this list, you're making perhaps the biggest purchase of your life, and you deserve to have that purchase fit both your needs and wants as closely as possible. Your list should include basic desires, like neighborhood and size, all the way down to smaller details like bathroom layout and a kitchen that comes with trust-worthy appliances.

    3. How much mortgage do you qualify for? 
      Before you start shopping, it's important to get an idea of how much a lender will actually be willing to give you to purchase your first home. You may think you can afford a $300,000 home, but lenders may think you're only good for $200,000 depending on factors like how much other debt you have, your monthly income and how long you've been at your current job. (For an introduction to the terminology and structure of a mortgage, read our tutorialMortgage Basics.)

    4. How much home can you actually afford? 
      On the other hand, sometimes a bank will give you a loan for more house than you really want to pay for. Just like with the purchase of a new car, you'll want to look at the house's total cost, not just the monthly payment. Of course, looking at the monthly payment is also important, along with how much down payment you can afford, how high the property taxes are in your chosen neighborhood, how much insurance will cost, how much you anticipate spending to maintain or improve the house, and how much your closing costs will be. (For help deciding what mortgage type is best for you, read Shopping For A Mortgage and Make A Risk-Based Mortgage Decision.)

    5. Who will help you find a home and guide you through the purchase? 
      real estate agent will help you locate homes that meet your needs and are in your price range, then meet with you to view those homes. Once you've chosen a home to buy, these professionals can assist you in negotiating the entire purchase process, including making an offer, getting a loan, and completing paperwork. A good real estate agent's expertise can protect you from any pitfalls you might encounter during the process. (Keep reading about this in Finding A Listing Agent and The Benefits Of Using A Real Estate Attorney.)