While owning property can be a lot of fun, it can also be overwhelming. At some point in time, you will need to decide whether to hire property management services or to manage the property yourself. Hiring a property manager is a financial investment, so you must understand the advantages and disadvantages involved. Here are the pros and cons of Denver property management.
Pros of Property Management
A professional management company will take care of all the tasks involved in managing your investment such as taking tenants’ calls, meeting with prospective tenants, organizing walk-through inspections and collecting rent. That will give you ample time to handle your other commitments.
Property management companies have a wealth of knowledge and experience at their fingertips. They can appropriately handle all potential scenarios that may arise. They can recommend the highest possible rent you can charge based on the current trends. They also stay up to date with the state and federal laws and regulations, helping you avoid law violations.
Tenant Sourcing and Screening
Finding tenants takes time. The screening process can be difficult especially if you’re using a lax regime. You could end up admitting problematic tenants, which will be frustrating both psychologically and financially. A property management company will use its vast marketing experience and networks to get tenants as soon as possible. It will also screen out risky prospective tenants to ensure you get a steady income from your property.
A professional property manager has connections with other professionals and groups in the Denver area. When your property requires some repairs or upgrades, the manager will be able to recommend companies they know or have worked with in the past. Because of their working relationship with the manager, the companies will offer their services at fair prices. This shields you from unscrupulous vendors that will overcharge you because of your lack of industry connections.
Cons of Property Management
Third-party property management affects your property margin. A property manager will charge a base rate or a fee based on the rent they collect. There are also other fees involved. For example, filling a vacant unit can cost 50% to 100% of the first month’s rent. A reliable manager with lots of experience and expertise will charge higher prices for the greater peace of mind they will give you.
A property management company will use already set policies, terms, and conditions to manage your property. The company will also have to manage several properties at a time. As a result, it may not take care of your property as well as you would have on your own. The company will follow strict guidelines when screening tenants and may not probe to know who they really are. This means a bad tenant with a clean record may be admitted while a good tenant with few blemishes is turned away.
Now that you know the pros and cons of Denver property management, you should make your final decision. Make sure you consider your budget restrictions and availability before deciding whether to manage your property personally or hire a property manager.