There are plenty of would-be real estate investors who don’t get into the income-property game simply because they’ve heard about all the landlord nightmares. They don’t want to deal with late rent, or midnight phone calls about clogged toilets, or problem tenants.
One way to alleviate those landlord headaches is to hire a property management company. For a fraction of the gross monthly rent, a property manager will handle those things for you. But paying a property management company, of course, is an operating expense that cuts into the real estate owner’s return.
And some property managers charge more than others, perhaps providing different services. Property management companies aren’t created equal, so the level of involvement varies. That can lead to a simple question for an owner of a rental property: “Which services do I really need?” Here’s what you should probably know.
The No. 1 Landlord Problem
You can be a great landlord and have tons of headaches. The reality is that no matter how great a real estate investor or landlord you are, your experience with a rental property is likely to be only as good as the tenants you attract.
Therefore, the most fundamental service a property management company can provide is tenant screening and qualification. Bad tenants are going to lead to a bad experience, which means that good tenants are the key to having a good experience.
In San Jose, real estate is in high demand. That means that every property marketed for rent is going to receive a lot of visitor traffic and rental applicants. A good San Jose property manager, therefore, will have established procedures and practices in place to not only handle all the showings but to properly vet each and every applicant.
Properly screening for qualified tenants saves owners of the property both time and money. It’s the essential ingredient that property management services can provide.
Aside from having tenants who won’t or can’t pay rent on time (or who damage your property), the next-worst thing about owning a rental property is the interruptions in your daily life. Sure, a midnight phone call about a toilet is a major inconvenience, but so are other tenant complaints. When you’re walking into an afternoon business meeting at your regular job, you don’t want to hear from your tenants about the garage door opener not working or there is a leak under the bathroom sink.
Having a property management company that provides 24-hour service means that you won’t have to take those calls. You get to go about your normal life, and, if there’s a problem at your rental property, it will be taken care of. With a property management company, you don’t have to be at the ready anytime something goes wrong. In fact, your tenants will not have your phone number. The peace of mind can be well worth the cost you pay each month out of the rental income to a property manager.
Communication is Key
You don’t want to get midnight phone calls, but as the owner of a rental property, you DO want to know what’s going on with it. A reputable property management company will keep owners in the loop, letting them know how satisfied the tenants are, apprising them of any potential issues, and updating them on financials. It also provides a two-way conduit of communication.
Lloyd Kipp, a San Jose property manager and owner of Valley Management Group, says: “A good property management company should also provide timely communications with both the rental owner and tenants. Good communication between landlords and tenants is an important aspect of having a successful rental property business.” In addition to these three vital services, a good property management firm will also: advertise and show properties, provide eviction services if necessary, collect rent, maintain accurate records, keep up-to-date on governmental regulations and handle all leases and paperwork.
Valley Management Group has over 35 years of experience in residential property management in San Jose, Santa Clara, Campbell, and other locations in Santa Clara County. They remove all the hassle and worry out of rental properties, all while maximizing rental property owners’ rental income and investment growth. Call them for a free quote and get one month of free property management services when you sign up for their services.
Reviewed and Approved by Lloyd Kipp
Property Manager and Owner of Valley Management Group