Property management companies act as middlemen between tenants and property owners. These companies provide the day-to-day, hands-on management services required of any property. They are frequently employed by commercial owners of multiple properties, who would not have the time to deal with all of the properties themselves.
Pro: Less Work
Owning and managing a rental property can require a lot of time and work. Roofs can leak, basements can flood and pipes can freeze in cold weather. Tenants can complain about conditions, fail to pay rent, and hold out-of-control parties that cause damage to your property. When you hire a property management company, they earn their pay by dealing with all of these problems for you. This means that, theoretically, you can be sitting on a beach in the Cayman Islands and making money off of your properties. Of course, it is rarely this simple.
Pro: Distant Properties
If you own rental properties and manage them yourself, you are either limited to properties in your community or committed to traveling frequently to and from the distant properties. With the help of a property management company, you can invest in distant rental properties without having to travel to them on a regular basis. Be sure to research a company's reputation and references thoroughly before entrusting it with your property. Working with a company you trust can be an enjoyable and profitable experience. Working with a company that is inept or dishonest can be a nightmare.
Con: Lack of Knowledge
When your property is cared for and maintained by others, you are less likely to keep a close eye on what is going on there. Even a competent property management company will not lavish as much attention on a property as the owner would. There is a higher possibility, therefore, of tenant or structural problems going unnoticed until they become larger problems. Whether the services of a property management company make sense for you depends largely on how much time you have to devote to your property and how closely involved you want to be with its operations.
Property management companies are not charitable organizations; they charge for their services. If it is important to you to maintain your distance from the nuts and bolts of managing your property, the cost is probably worth it. The fact remains, however, that a property owner who retains the services of a property management company will ultimately make less money than if he managed the property himself. If you have little or no experience in building maintenance, this cost will probably be ameliorated because a professional manager will likely do a better job of maintenance than you would, saving you money.
- Immeuble image by Francis LempÃ©riÃ¨re from Fotolia.com