Hiring a property management company can be a big expense, especially in the short term. It can also save you money in the long run. Whether your Chicago real estate management company will end up in the expense column or save you more than it costs depends on the services you use and the quality of the management team.
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Savings on Day to Day Operations with Property Management
A property management company may be low on your wish list if you have good tenants, a small property in good repair, and live nearby. However, an accredited property manager becomes an asset when you live out of town, lose a tenant, or the property needs repairs. A good manager will take care of the repairs, find a quality tenant, and keep you updated no matter where you are.
Conversely, you would have lost days of traveling back and forth, spent time and money looking for a new tenant, and possibly overspent on costly repairs. Accredited property managers do this every day, and they do it well. They have the staff and experience to handle problems quickly and efficiently at a very reasonable cost.
Hiring an Accredited Property Manager Can Save you Money in the Following Ways:
- Finding quality tenants, checking background reports and references
- Managing turnovers so the property retains full occupancy
- Managing the rent collections so that late payments and evictions are rare
- Lowering maintenance costs
- Increasing the value of your property through preventative maintenance and keeping rates current
Also, if you are building, remodeling, or adding to a commercial property, hiring a good construction management specialist is a must-do, and a qualified Chicago commercial real estate management company can save you money by actively supervising the work and representing you on-site.
How a Property Management Company Can Help Increase Your Rental Profits
Working with a property management company can help boost profits in several ways, including:
- Reducing your vacancy rate: A property management company can effectively market your property, using its expertise and resources to attract potential tenants. They can also suggest and implement strategies to retain existing tenants, including offering lease renewal incentives and maintaining strong tenant relationships. By reducing vacancy rates, you can ensure a steady rental income.
- Choosing high-quality tenants and dealing with potential issues: Property managers are skilled in screening tenants, conducting background checks, verifying employment, and checking references. By selecting high-quality tenants, you minimize the risks of late rent payments, property damage, and eviction processes. Additionally, property managers can handle tenant complaints and issues, mediate disputes and enforce lease terms when necessary.
- Maintaining your property’s value: Regular maintenance and upkeep help preserve your property’s value and prevent costly repairs in the long run. Property management companies can schedule routine inspections, coordinate repairs, and manage preventative maintenance tasks. They also have established relationships with reliable contractors and vendors, which can lead to further cost savings.
- Protecting you legally: Property managers know local, state, and federal landlord-tenant laws and regulations. They can help ensure compliance with these laws, reducing the risk of legal issues and potential fines. They can also assist with lease agreements, eviction processes, and other legal matters related to property management.
- Monitoring rental rate trends: Property management companies are familiar with local rental market trends and can suggest appropriate rental rates for your property. They can also recommend rent adjustments based on market conditions, helping you maximize your rental income while maintaining competitiveness in the market.
- Improving your real estate investment portfolio: A property management company can provide valuable insights and advice on expanding your real estate investment portfolio. They can help identify potential investment opportunities, assess the profitability of various properties, and guide you in making informed decisions to enhance your portfolio’s performance.
- Maximizing your free time: By delegating property management responsibilities to a professional company, you free up time to focus on other personal or professional pursuits. Outsourcing property management tasks can reduce stress, improve work-life balance, and allow you to enjoy the benefits of property ownership without the day-to-day hassles.
Cost Savings on Maintenance and Repairs
Maintenance and repairs are one of your biggest expenses on a rental property. It can be a constant hassle for most landlords, but good Chicago commercial real estate management companies solve the problem by having staff on standby to handle any problems. These handymen have the experience to get the job done efficiently and inexpensively.
Consider a situation with a leaky faucet. If you don’t have the time or ability to fix it yourself, you might have to hire an expensive plumber. A good property manager will have a qualified handyman on staff to get it done at a rate far below the plumber’s hourly fee and without the hassle of dealing with unknown contractors.
If you need the services of an outside professional, your property manager has relationships with reputable contractors and can expect the best rates. You don’t need to worry about finding someone you can trust or whether the contractor will do a good job. Your property manager will oversee the work and make sure it is done in a timely manner.
Potential for Increased Costs When Using a Poor Real Estate Management Company
There are various fees and costs of doing business with a property management firm. Your total cost will depend on the services you receive and whether you pay a flat rate fee or a percentage of gross receipts on the property. If your management company does a good job, the property will be well taken care of, and your costs will be reasonable.
If you choose the wrong real estate management company, problems could increase along with your costs. When hiring a commercial real estate management company, check its reputation and references. If you choose the wrong property manager, expect your costs to rise.
Problems with Poor Management or Lack of Attention
Property management companies exist because most owners lack the expertise, experience or resources to provide the best management. The same situation can also happen when you hire the wrong management company. A poor management company can increase your costs and problems in many ways. Problems happen, but if you experience repeated problems, costing you time and money, consider whether a more experienced property manager could have prevented them.
Poor property management frequently results in one or more of the following problems:
- High turnover rates and loss of rent
- Longer than average time to find new tenants
- Poor quality tenants, late rents, evictions, and property damages
- Poor relationships with tenants
- High repair bills
- Lack of inspections and preventative maintenance
- Poor communication with tenants and/or with you
- Legal problems that could have been avoided
A good, accredited property manager is a valuable asset to your rental properties. While hiring a good real estate management team may seem expensive initially, their professional expertise can save you money, time, and personal frustrations.
GNP Realty Partners is Committed to Your Success
At GNP Realty Partners, we are committed to providing our clients with the highest quality of service. We have the necessary expertise and first-hand experience with Chicago property management to maintain and grow the value of your property. If you are looking for a hard-working, dedicated team of professionals with the knowledge to handle your properties, GNP Realty Partners would like to show you how we can help.
Original April 2019 blog post updated on August 2024.
