Managing a rental property isn’t as easy as simply throwing up a “For Rent” sign and waiting for the perfect tenant to walk through the front door. There are a lot of moving pieces, many of which include complex legal items. One wrong move can cost you big, so the question of whether you should hire a property management company or manage your rental on your own should be considered carefully. To explain just how complex property management is, let’s go over just what property managers actually do.
Advertising and Screening
The first step to managing a rental is having someone to rent to. The pitfall that many DIYers fall into is renting to the first interested party that shows up. Some of them choose to do so WITHOUT screening. Believe it or not, but 50% of DIY landlords don’t conduct a criminal background check, a little over 40% check the sex offender registry, and 23% said they never or rarely complete a background check at all! This is startling considering that your rental is one of your biggest investments you own. Putting the wrong person in your home can lead to huge consequences, massive headaches, and sometimes legal problems. Professional property managers not only advertise across multiple platforms, but conduct extensive screenings on all interested applicants. They check credit, national criminal (including sex offender and terrorist watch lists), and rental and evictions history. They also check each applicant’s income to make sure they qualify for the property. Experts recommend that a tenant make at least 3xs the amount of the rent.
Navigating Legal Ropes
Property management can often feel like walking a legal tight rope. You have to keep everything in balance and stay on the right side of the many laws surrounding renting your home or else you might fall into a heap of legal trouble. Knowledge is key. You have to know all landlord and tenant laws, including Warranty of Habitability, Colorado’s Law of Quiet Enjoyment, Federal Fair Housing, and tenant privacy laws just to name a few. And if that isn’t enough, these laws are constantly changing as new situations arise. Knowing these laws help to keep you out of legal hot water and is an essential part of property management. This is why hiring a professional property manager can be a huge benefit. Property management is their job, which means they have to keep up to date with all state and federal laws. They also have the resources available if legal situations do arise, including sticky tenant situations, evictions, and more.
Rent collection is the ultimate goal of leasing your home. After all, you have to pay the bills and want to have some form of income flowing in. A professional property manager not only collects the rent, but can offer many different options for payment. Online payments, tenant portals, check processing, etc., are all part of the property management solution to help tenants pay on time and provide convenient 24/7 access to do so. Not only do they collect rent, but they also know how to deal with tenants when they don’t pay. Having a clear and firm payment policy helps, and when tenants don’t pay, a property manager knows the steps required to obtain payment or begin the eviction process if necessary.
Regardless of how well you keep your rental property, maintenance repairs will always pop up. Appliances wear from normal use, things break or get damaged, and systems need attention and preventative care. A property manager not only needs to be constantly available for tenant calls and requests, but knows who to contact when maintenance is needed. You need a vendor for any and every potential situation, i.e. handymen, electricians, plumbers, etc. It also helps to have back-ups for each vendor in case they’re not available when emergencies arise.
Property management has many ins and outs. Finding a tenant is only the first step in a long road. Having someone who knows all of the twists and turns is a huge benefit that many savvy landlords and seasoned investors choose instead of doing it on their own. So when it comes to putting the “For Rent” sign up again, consider hiring a professional property management company like Real Property Management Colorado. We have the knowledge, skill, and time to manage your investment so you can spend your time on what’s most important to you.