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Why Real Estate Investors Need Professional Property Management

If you are just beginning to invest in single-family homes, or have a portfolio of homes, how do you start, grow, and scale your investment portfolio?

Here are some critical tasks a property manager can help you with:

1. Managing Long-Distance

Do you live in a different state than your investments? The best opportunities for income and long-term growth may not be in your neighborhood. I live in Brooklyn. My investments are in Memphis, Chicago, and elsewhere. Do I need a professional management team looking out for my interests, and the interests of my investment team? The answer is obviously yes.

If you live close to your properties and are a handy man or handy woman, the do-it-yourself approach may make sense. But it may prevent scaling your business.

2. Optimizing Your Opportunity Cost

Do you have the time to manage multiple properties? Let your property manager take care of the day-to-day, so you can focus on the investing part.

3. Managing Vendor Relationships

Do you have long-term business relationships with contractors, electricians, exterminators, plumbers, and other vendors? Do you want to supervise these contractors to insure that the work is done properly? Probably not. Your property manager should, and if you choose your team right, they will.

4. Property Repairs

Do you want to get the call from a tenant in the middle of the night or while you are on vacation that there is an issue with the house that you need to deal with immediately (i.e. heating or air conditioning not working or a busted pipe that is now flooding the house). When a tenant moves out do you want to scope out what needs to be done in the house to make it rent ready for a new tenant? Your property manager will handle both routine and emergency maintenance, do the regular inspections, and resolve potential conflict.

5. Advertising Your Properties

Do you know where to market your properties, both online and offline? The clock is always ticking…advertise right, avoid long vacancies.

6. Setting the Right Rent

Property management companies look at local comps to maximize your monthly income, and theirs, too. They evaluate by size, age, location, and amenities. It’s what they do.

6. Finding and Keeping the Right Tenants

Experienced property managers are experts at screening for good tenants; or should be. Management does the details, so you don't have to: criminal background checks, credit reports, employment verification, and landlord references.

8. Collecting the Rent

Do you like collecting rent, particularly past due rent? Property management companies have systems to effectively collect and maintain on-time payments. How critical is timely payment to maintaining cash flow? Very.

9. Complying with Local Laws

Do you know the local, state, and federal regulations? Are you well versed in the ADA? A property manager can help you avoid lawsuits by keeping your property up-to-date and in compliance with these regulations.

How Much Does it Cost?

Most property managers charge a percentage of your property's monthly rental rate in exchange for their services. The rate typically runs anywhere from 6% to 10%; which for many is a reasonable price for peace of mind. Management fees for multifamily buildings are lower than single-family homes as single-family homes are typically spread out and require more intensive management.

For more information on why your should consider investing in a professionally managed portfolio of single-family homes, please contact Harold Willig at 917-209-4452 or harold.willig@springviewinvestments.com

Harold Willig is the Manager of SpringView Investment Management, LLC, which he founded in 2012. Mr. Willig also served as HFZ Capital Group’s Chief Financial Officer, and was responsible for the oversight of HFZ's Finance and Accounting team. He has over 16 years of finance and accounting experience. Mr. Willig also ran a consulting practice and provided valuation, analysis, and transactional support services to multi-billion dollar real estate companies. Previously, Mr. Willig served as the Senior Controller and Vice President of Financial Analysis and then the Chief Financial Officer of the Athena Group, a multifamily development company and fund manager.

This post does not constitute investment, tax, legal, or real estate advice. It is not a recommendation or an offer to buy or sell. No warranties implied. Past performance does not guarantee similar future results.

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