When Should You Hire a Property Management Company?

Although hiring a property management company has many advantages, using one can be expensive. And, even apart from the cost, relying on a property management company is not for everyone. Consider the following factors to determine if hiring a property management company would be a good decision for your business.

You should consider hiring a property management company if:

You have lots of properties or rental units. The more rental properties you own and the more units they contain, the more you're likely to benefit from a management company.

You don't live near your rental property. If your rental property is located far from where you live, hiring a property management company can be invaluable in dealing with the many issues that you will not be able to handle from afar.

You're not interested in hands-on management. Many landlords look forward to the challenge of finding good tenants and the rewards of maintaining a safe and attractive property on their own. But if you view rental property ownership strictly as an investment and want little or nothing to do with the day-to-day management of your properties, consider hiring help to manage your property.

Your time is limited. Even if you enjoy hands-on management, you may not have much time to devote to your business, especially if landlording isn't your day job. And if you prefer to spend your time growing your business, including searching for new properties, arranging financing for renovations, or changing your business structure, then a management company may be a good way to spend your money.

You can afford the cost. Hiring a property management company is an attractive option if you can afford the fees. When interviewing companies, expect to hear quotes ranging between 5% and 10% of what you collect in rent revenue. If it's a down market and you're able to manage things yourself (or with the help of a resident manager or other employees), you may want to keep doing so until the market turns around.

You're suddenly inundated with management tasks. If your business is growing, at some point you may find that you need a substrantial amount of help to manage everything properly. At that point, it might make sense to hire a management company.

You don't want to be an employer. If you hire a resident manager or other employees to help with your property, you become an employer. You'll have to handle payroll and deal with a host of other legal requirements and considerations. But, because a property management company isn't your employee (it's an independent contractor), and neither are the people who work for the company, by using one you avoid the hassles of being an employer.

Your property is part of an affordable housing program. If you participate in an affordable housing program, things can get complicated. Usually, in these programs the landlord receives financial assistance, which may be in the form of a grant, low-interest loan, or tax credits, in return for agreeing to rent at least part of the property to tenants earning below a certain income level. In order to continue receiving the assistance, the landlord must comply with a complicated set of rules. With so much at stake, it's often worth hiring a property management company that has expertise and experience with the particular housing program in question.

What Does a Property Management Company Do?

Management companies deal directly with prospects and tenants, saving you time and worry over marketing your rentals, collecting rent, handling maintenance and repair issues, responding to tenant complaints, and even pursuing evictions. Plus, a good management company brings its know-how and experience to your property, giving you the peace of mind that comes with knowing your investment is in good hands. Finally, a management company is an independent contractor, so you avoid the hassles of being an employer.

What Do You Look for In a Management Firm?

Valid Brokers License: In California and other states a broker’s license is required to operate a property management company. You can check to with the local dept of real estate to validate it and see if it has ever been revoked or suspended.

Insurance: Ask for a copy of their business liability and E&O insurance. Adequate coverage protects you best. Be sure it’s current.

Management Fees: Property Management fees are generally a percentage of rental income. Shop it around. Expect fees of 5% or more as a percentage of rental income. If you own a single family home or a duplex that has low rental income, you may get quoted a flat rate. Expect $200 to $250 for full service management of a single family home.

Maintenance Staff: Does the firm have its own maintenance staff? Are they 24 x 7 for emergencies? Will they provide you with itemized statements and for larger jobs three independent bids? Does the company charge a fee on top of the management fee for major upgrades?

Working Relationship: Are they friendly and is the staff easy to reach at during normal business hours? Is the office clean and uncluttered? Are they responsive? Will they provide referrals or reviews? Do you want to work with them?

Reporting: All property Management firms should have software that will provide you with easy to read monthly statements.

Accounting: When will the manager mail your check to you? Can you use direct deposit? State laws usually dictate accounting rules for managers it’s good to have that information at hand. 

Online Statements: Many firms will have online monthly itemized statements available to owners. This convenience will increase transparency and save you time. 

EFT: Does the management firm allow tenants to pay online. This would allow bounced checks to be discovered sooner and will speed your cash flow. 1099: Will the management company provide you with an IRS-1009 and a summary profit and loss statement for tax purposes?

Reserves: Most companies will require you leave some funds on deposit so they don’t have to call each time to fix small items. You should ask how much reserves the company requires and limit how much a company may spend on your property for maintenance or repairs before needing your approval. Is $500.00 appropriate or $750.00, discuss your comfort level before you sign.

Vacancies: Do they charge a rental fee? Often companies will charge a percentage of the month’s rent for the service of renting a unit. The screening process should include an application, a credit report, a conversation with the prior landlord, and documented income verification.
The service should include reporting a qualified tenant to you and a proper lease. Be familiar with the process so that you can determine for yourself that a good job is being done. You only want good tenants, evictions are expensive. Viewings: Some companies will be there for a showing to groups of people interested in the unit. Other companies allow prospective tenants use of the keys with a small deposit. Find out how viewers can see your property and whether you are comfortable with their procedures. If the management company staff shows the unit, ask how often they will show. Do they work weekends when most people are looking?

Advertising: How will they advertise the vacancy? Be clear on all costs involved and have limits or a system of approval.

Evictions: This should require a lawyer and the proper legal procedure for your area. How do they charge for this and will the lawyers’ fees be invoiced so that you can see the true cost.

Termination of your Agreement: We like contracts that can terminate in 30 days with a written notice and without penalties. An exit plan that is agreeable to you is critical.

How to Choose a Property Management Company

Many property owners that would like to sell now find they have to hold and manage. If you own far from where you live or you simply aren’t interested in managing a second business, you should consider a professional property management.

Does One Size Fit All?

No. Property Management companies come in all sizes, some manage 20,000 units and others 500. Many property management companies are a small or family business’s. A large management company should have more resources available, but service may not be personal and it’s easy to get lost there unless you have a large portfolio. That’s the first point to consider; which size management company will give you personal service.

Interview smaller companies that would bend over backwards for your business. You may get better service and price leverage.  If you choose this route, try to assess whether the company can absorb new business quickly, it’s a litigious business and they must be responsive day one.

If you have a single family home or a smaller rental property it’s just not that attractive to many companies. Not much income and although a larger company may welcome you, they may not give you much service. You may find that suddenly, you have many more little maintenance items than ever before as they maximize income within house maintenance and repairs.

Benefits of Hiring a Property Management Company

If a property owner decides that they're not able to properly manage their property, it's important to understand what side effects they should expect. In general, a well-run property management company will yield these results for owners:

• Increased revenue. A property management company is more experienced at advertising and usually has access to larger pool of potential renters, meaning units typically stay vacant for shorter periods of time. A property management company also has a better understanding of the local rental rates, putting them in a position to maximize the amount you can charge per property.
• More free time. Naturally, once an owner hands over the responsibility of managing its properties to a company, they're going to have extra time on their hands. This is perhaps the most obvious – and enjoyable – benefit of hiring outside help. The property management company becomes the owner's one point of contact for all things related to their property, eliminating the need to juggle a number of different vendors and services. A property owner can also use this extra time to expand their portfolio and focus on growing the business.
• Reduced direct costs. A property management company is be able to perform preventative maintenance, reducing the direct costs to the property owner. Furthermore, a management company will likely have extensive knowledge of local landlord/tenant laws, helping shield the owner from costly lawsuits. One lawsuit avoided may pay for years of property management fees. Finally, the management company likely has more experience screening tenants. This reduces vacancy cycles and damages from poorly screened tenants.

Consultation

When people begin thinking of purchasing a piece of investment property they often wonder where the best place to buy within the city of their choice. Most people have different goals and levels of expertise to draw upon while owning rental property. Swift properties can help. Through our consultation process we will establish if you really want that low rent apartment complex or would you be better served with one or more single family homes. Maybe a duplex is best. We really won’t know until we talk.

Are you already in escrow on a place? What kind of rents can you expect in that area? Your real estate agent probably knows the sales market. However, does your agent really know the rental market? Maybe you need to talk with us before you close on that deal.

The wrong decision can have a very detrimental affect on getting a place rented at a rent the new owner needs to cover the expenses. However, when people have made the correct decision, we have often had a tenant ready and waiting to move in when escrow closed.

Give us a call and we will be happy to schedule an appointment to talk over your situation.

Owners Services

All of Swift properties agents are skilled at showing our clients residential or commercial properties and hi-lighting the properties benefits. We always show a property in person. We never give out a key to a prospective tenant and allow them to view a property on their own. All prospective tenants go through our extensive screening process with a full credit check and background investigation. Our skill and professionalism helps keep the vacancy factor low, the rents coming in on time and the repair problems at a minimum.
With full time management, Swift properties will collect the rents, deliver legal notices if required and pay all authorized repairs bills from your account. Monthly you will receive a computer generated Income and Expense statement along with your check. We can even cut a check directly to your mortgage holder for you, directly from your proceeds. These added services are with no additional fees.
We have 24-hour emergency repair systems in place so that your tenants receive the fastest service possible with the least amount of expense to you. We also access a compete list of service and repair personnel that are highly skilled at their jobs and yet provide service at reasonable rates. We will never call out a licensed contractor to handle a job one of our skilled handy persons can take care of.
Our fees for Full Time Management are negotiable depending on the number of units managed, the overall condition of the units and other factors that may affect the amount of time required to effectively manage the units.

Owners of Commercial properties please take note:

Many companies are charging a lease up fee. A particular amount to be paid to the management company once a lease has been negotiated. Our fees are based on an agreed percent of the contract rent. The fees are collected each month when the tenant pays rent. So if you don’t receive your rent we don’t receive our commissions.

About Us

Swift Properties is the premier leasing and management company for residential and commercial rental property in Redding, Shasta Lake, Anderson, Cottonwood/ Lake California and the surrounding areas. Our team of professionals provide extensive rental property management and in depth investment consultation services. lf you have investment property in Shasta County or Northern Tehama County or are contemplating investing in property here, we would like to serve you.

Swift Properties offers one of the most extensive lists of available rentals in Shasta County and northern Tehama County. Whether it’s a commercial site for a business office or retail store or an apartment or home; prospective tenants will find what they are looking for. We offer efficiency studio apartments, upscale Townhomes, modest single family homes and spacious executive style homes. We often have a nice selection of acreage properties suitable for horses, cattle and other livestock. Our company is also one of the few with a representative dedicated to nothing but showing properties to prospective tenants. This service provides the most convenience to the tenants in the often hectic time searching for a new place to live or house a business.

Tenants have also come to know Swift Properties as a company that is responsive to their repair needs, especially in emergency situations.