The income received from owning a rental property is the most important aspect of investment property ownership. As such, the ability to set competitive rent prices, and collect that rent in a timely and efficient manner, is essential. Rental property owners should look for experienced property managers who can handle both issues with ease.
Choosing the Rental Rate
Not every rental property owner is aware that finding a good rental rate is actually a fairly precise science. Property managers must be knowledgeable of the local market and also do regular market research to come up with the best rental price for the units they manage. Though most experts believe that rent should be 1% of a property’s value per month, experienced property managers like Martin Feinberg know that such rules can’t always predict the current market’s value or what perspective tenants will be willing to pay.
Raising Rent
Setting an initial rent rate for a property is important, but it’s not the end of the process. Regular rental rate surveys should be performed, at least annually if not more frequently, to make sure that each property is continuing to go for market value.
Collecting Rent
Collecting rent is one of the most important duties of a property manager because how rent is collected has a direct impact on a property owner’s cash flow. Professional property managers need to have a proven system in place for processing tenants’ rent and getting it to their owners each month. They should also have a system for handling late rent payments, bounced checks, and/or nonpayment of rent.
A good property management company is one that is both firm but also reasonable when it comes to rent collection. Tenants will take advantage of a property manager who is too lenient, but will quickly become unhappy with one that is too strict. Property managers should have detailed leases that explain exactly what is expected of tenants while also outlining possible grace periods for when unexpected things happen.
Evictions
Dealing with evictions for nonpayment of rent is one of the most difficult aspects of working with rental properties. Many owners choose to utilize a property management company for that reason alone. As such a property manager’s eviction process should be well-documented and also in full compliance with all federal, state, and local laws.
