Investors – Are You Using A Management Team To Run Your Rental Property?


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Any investor who has thought about getting into a rental property would find that today’s market climate is the perfect opportunity to do so.  As more and more families are opting for renting over owning, rents continue to creep upwards.  Also, property values across the board have been depressed to such levels that finding a deal is no longer a far fetch idea.  The combined implication is that investing in rental properties has become potentially much more profitable than it has ever been in recent times.  A rental property investment becomes a more efficient venture when the investor leverages their time by hiring a management team to run the day-to-day process of managing the property.

Raising enough capital to secure the purchase of a rental property is one thing.  Managing the property to make it profitable, while paying off the loan is another ball game.  There is a whole lot involved in efficiently managing rental properties, from advertising to potential renters and collecting rent, to performing maintenance, all requiring lots of man-hours.  Obviously a lone investor or even a group of investing partners, who already have their hands full looking for deals and buyers, cannot possibly manage all theses tasks efficiently.  Hence, the need for a management team becomes indispensable.

The size of the management team would naturally depend on the size of the property.  Smaller properties with relatively few units may only require a lone manager, perhaps one who can combine both managerial and maintenance duties.  But the bigger a property gets, the more specialized the personnel have to be.  Most rental properties would hire at least one general manager, and one maintenance employee.  Some will require in addition to that, assistant managers, and secretaries.  Perhaps the maintenance role would have to be further split into plumbers, landscapers, electricians, and cleaners, depending on the property’s level of complexity.

Rather than hire personnel by themselves, investors may find hiring the services of a real estate management company, an even better time leveraging strategy.  Real estate management companies provide all the personnel that are necessary to run the business, dispensing the need for seeking out, interviewing and processing candidates to fill in the necessary slots.  They are usually paid a percentage of rents collected.  This provides a great incentive for them to always strive for maximum occupancy.

The decision as to whether a management team or a hired company would be better for business, should always come down to the overall costs.  Usually for very small rental properties that may only require a handful of management personnel, investors might find it less costly hiring their own employees.  A management company however, would more efficiently manage larger apartment complexes.

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