4 Convincing Reasons Landlords Should Hire a Property Management Company

If you’re a real estate investor who hasn’t hired a property management company, you’re missing out. Having a property management company to handle all tenant business is like having a virtual office you don’t need to manage. You get all the benefits of having a full staff on board to manage your properties, collect rent, screen tenants, and fill vacancies, but you don’t need to lift a finger.

Not yet convinced? These 4 reasons may change your mind:

1. A property management company knows how to collect unpaid rent

There are endless reasons tenants don’t pay rent on time. In most cases, rent is just late, but when a tenant doesn’t pay rent at all, it’s not going to be easy to collect.

Property management companies have effective strategies for dealing with unpaid rent that include establishing clear expectations, automating rent collection, holding high screening standards, and evicting a tenant when necessary.

Without a property management company to help collect unpaid rent, you’re stuck using your own negotiating skills. If you don’t get anywhere, you’ll have to resort to a collection agency. However, using a collection agency to collect unpaid rent isn’t statistically successful. Statistics show that 80-90% of the debt sent to a collection agency will never be paid back.

The best way to avoid unpaid rent is to hire a property management company to screen tenants and set up high expectations from the start. If you’re new to being a landlord, innocent mistakes can make tenants see you as a pushover. For instance, letting late rent slide more than once and not requesting contractually-obligated late fees.

2. You’ll wish you had help after your first eviction

If you’ve never had to evict a tenant, congratulations! You’ve managed to avoid one of the most time consuming, frustrating, costly activities landlords face. If you’re wondering why landlords hate evictions, Bigger Pockets spells it out clearly.

Evictions halt cash flow, which can cause extreme stress

By the time eviction papers have been formally filed, the tenant has already stopped paying rent. During the eviction process, your cash flow comes to a halt and since the tenant won’t move out, you can’t replace that lost income until the entire process is complete. It could be several months before you can put the unit back on the market and generate income. That’s not good news if you’re still making mortgage payments.

Be thankful if you’ve never had to deal with an eviction, but don’t count on maintaining that track record. If you own more than one rental property, you’re more at risk for having to evict a tenant at some point.

Once you have to deal with the eviction process first hand – the court fees, paperwork, attorney fees, process server fees, moving costs, and parking fees just to get into the courtroom – you’ll wish you had help.

A property management company will help you avoid all of the frustrations that come with evicting a tenant. They’ll know the laws, too, so you don’t need to worry about doing something wrong.

3. You’ll avoid some conflict by hiring a property management company

Being a landlord has plenty of potential for conflict. For instance, enforcing lease terms when a tenant is clearly in violation can cause stressful arguments. However, the biggest potential for dangerous conflict comes from evictions.

Evictions are full of stress for both you and the tenant being evicted. Tenants facing eviction might not have anywhere else to go. When an armed police officer shows up to escort them off the property, they aren’t going to like it.

An evicted tenant might retaliate against their former landlord with violence or by destroying the property. If you have a family to protect, it’s better not to be the bad guy. You don’t want a resentful, vengeful evicted tenant to send someone out to your home in retaliation.

A property management company consists of individual people, but it’s less personal when an eviction notice is filed by a company rather than a person.

4. Landlord-tenant laws are complex

There’s a joke among lawyers that points out how much of what they learned in law school doesn’t seem to apply in the courtroom. That’s not to say laws aren’t applicable, but the laws are so complex that direct experience trumps memorizing the law.

The truth is, laws are nuanced and you can’t rely on a textbook understanding of the law to get by as a landlord. On the other hand, a reputable property management company will have lawyers on their team and the experience needed to avoid violations that could get you in trouble.

Ready to hire a property management company?

If you’re convinced that a property management company is the way to go, search for a local, reputable company and schedule a consultation. Whether you have one property or twenty, getting help will make your life as a landlord easier.