Let’s Talk Real Estate – November 2015
Over 36% of all single-family homes in the United States are rental homes and that number is climbing. Home ownership was at an all-time high in 2004 with 69.2% of single family homes occupied by the owners; but, that number has fallen to 63.5% and is expected to continue to drop closer to 60% in the coming years. This means there are an increasing number of homes being rented by the homeowner and as many as 50% of them are being managed by the homeowner.
Because of increasing and changing Landlord-Tenant laws, property management is becoming increasingly complex. The expectation of service is also increasing as rental prices soar. Many homeowners are now turning to professional property managers for the following 10 reasons:
#1 Saving money with skilled contractor relationships—A management firm vets contractors, looking for the best service and price from licensed, bonded and insured individuals. Because property management companies manage multiple properties, they can often secure quantity discounts from contractors and pass savings on to the homeowner. With outside services, combined with an in-house maintenance staff, they can also manage routine inspections and identify issues before they turn into major problems, leading to happier tenants and fewer high-priced emergency repair bills.
#2 Increasing revenue with high-quality residents—Screening residents preserves the revenue stream as property managers know how to spot red flags on applications and identify those applications most likely to pay on time and take good care of the property. Advanced technology with access to volumes of data allows property managers to quickly sum-up an applicant’s credit worthiness and access other important information.
#3 Avoiding legal problems—Skilled property managers understand landlord-tenant laws governing tenant rights, the eviction process, and safety. Areas of concern that must be understood include, discrimination, leasing disclosures, rent collection and late fees, notification and tenant rights, licenses and permits
#4 Increasing rents with higher occupancy rates—Good property managers know the rental market well and they know when to increase rents. They also put systems in place to fill vacancies as they come up and have little to no downtime. Many homeowners are still charging tenants rental rates that are a few years behind.
#5 Higher retention rates—Keeping residents happy is perhaps the best way to improve occupancy rates. A good property manager looks for ways to enhance the customer experience. That means renters have access to resident portals that make paying rent efficient and convenient. Answering the phone live and responding to service calls as quickly as possible helps professional managers increase satisfaction to curtail frequent turnover.
#6 Simplifying accounting and oversight—A professional property manager shares information about tax deductions and investment opportunities for owners’ consideration. While most managers don’t help owners prepare tax returns—that’s a job left to CPAs and tax professionals—they provide tools like owner portals that include on-demand owners’ statements and reports to keep owners informed about income, expenses and maintenance requests.
#7 Collecting rents on time—Efficient rent collection processes ensure financial success for property owners and managers. The management team assumes responsibility for establishing and enforcing strict payment guidelines. That means homeowners don’t have to spend time and money chasing down the rent every month.
#8 Enjoying the benefits of property ownership without giving up personal freedom—Some people invest in real estate as a means of funding an active retirement—especially in Southern Oregon. With a professional property management team minding the fort, owners can travel extensively, spend more time with family or explore other hobbies and interests—without worrying about their property.
#9 Increasing property value—Twice a year, preventative maintenance inspections by professional property managers can insure the property is being taken care of, minimize repair cost and insure the property continues to increase in value.
#10 Reducing stress—The nine benefits listed all serve to reduce the stress of property ownership. It’s not easy to put a price tag on living a life free from the hassles of being a landlord, but most would agree that less stress is definitely a valuable benefit.