If you own commercial property and you're not quite sure what to do with it, you're not alone. In fact, there are over 24 million independent landlords across the US.
Being a good landlord is a lot of work, but there are plenty of companies around to fill that gap. However, there are some important things to consider before hiring a property management company. Let's talk about that.
What To Ask Before Hiring A Property Management Company
Let's talk quickly about why you should hire a property management company. When you buy a commercial property and you do everything yourself, you're buying a job. Depending on the number of units in the building or how many buildings you buy, along with other factors like the age of the building, it can even be a full-time job.
Generally speaking, most landlords will spend 4 hours per month per property, just on maintenance. That's before paperwork, filling vacancies, and more.
Hiring a property management company is an affordable way to take this burden off your back and to generate passive income, which is income you receive regularly without any effort. Before you hire out though, there are a few things you will want to know about the company first.
While the help that comes with a property management company can prove invaluable, fees are first and foremost. How much are you going to be losing on your property?
While this isn't the only factor to consider, it's still important. 10-15% of the rent is pretty standard, but even if it's on the high end, that doesn't mean you shouldn't go for it. There are still a couple of other factors to weigh before making a decision.
Experience is crucial. It's likely the main reason you're even looking at rental property management companies. Make sure they have enough experience in things like setting the price, keeping up with the market, advertising and filling vacancies, maintenance, and everything else associated with property management.
Asking questions about this shouldn't be a problem for a truly experienced company. You'll know by their response if they have the resources and experience you need.
Another great thing to ask is about the quality of the experience that they have. How effective have they been at retaining tenants? What do other clients of theirs think about their services? These are great questions to ask.
Some property management companies do repairs themselves, some hire outside help. Some companies give you detailed business expenses for your taxes, some just update you as they go. Talk to them and ask specific questions about the types of services they can offer your business, so you can get the best return on your investment.
Get Renting Today!
If you're interested in hiring a property management company, now is the best time. The rental market is booming, and people will be relocating again now that the pandemic is wrapping up. While you're at it, check out our philosophy on how to be a good landlord!