It’s 9 PM on a Wednesday when your tenant calls you. Her 5-year-old just flushed a box of crayons down the toilet. And flushed. And flushed. The toilet is clogged, she reports, and the water is starting to pour onto the floor. Your rental property is 100 miles from your home, and you have an early client meeting at the office. Your go-to plumber isn’t answering the phone.
The details may vary, but every landlord has a few stories like this one. Emergency repair calls are one of the main headaches – and occasional nightmares – of owning rental property. But answering a tenant’s late-night call and handling the cascade of responsibilities that follow are just a few of the tasks involved in managing a rental property yourself.
Property management: The basics
Property management encompasses all the day-to-day operations required to maintain rental properties, from marketing vacancies to screening potential tenants to diagnosing repair needs and hiring repair vendors. Then there are lease contracts, rent collection, accounting, and of course, ensuring compliance with a host of local laws and regulations.
For most individual investors, these tasks represent the major hassles and pain points of the real estate investment experience. The labor required in property management can be time-consuming as well as unpredictable. It can also require specialized knowledge in a multitude of areas – from landlord-tenant law to local health and safety codes to fluency in building repair and maintenance.
Few investors enter the real estate market looking forward to these responsibilities. Many find them at best inconvenient and at worst bewildering or overwhelming. This is where a professional property management firm can be an asset to your overall real estate investment strategy.
Weighing the costs & benefits of using a professional property manager
A professional property management firm can benefit an owner in a number of ways. Some of the upsides to outsourcing the day-to-day operations of your rental property include:
- Free up your personal time from management tasks
- More predictability in your role (no more late-night calls from tenants)
- Consistent, professional tenant customer service (even when you’re on vacation)
- Access to a broader and deeper property management skillset and vendor network
- More freedom to continue investing – you can purchase more property than you can or want to manage yourself
- Greater geographic flexibility – with a trusted local partner handling daily oversight, you can pursue investments further from home, in promising but less familiar markets
- Income optimization – with operations as their singular focus and specialty, property management firms usually achieve faster rental unit turnaround and more efficient and profitable operations.
- Reliable relationships with local vendors – Great Jones vets local service pros and negotiates volume discounts on its owners’ behalf. They also have in-house handymen for routine and smaller-scale maintenance needs
- In-depth understanding of all relevant laws and regulations – a management firm can ensure you stay in compliance
- Proven, data-driven, best-practice approaches that increase success in areas like tenant screening
- A proactive approach to property maintenance to help protect your investment for the long term
Clearly, working with a property management firm can help you reap the rewards of real estate investing while mitigating risks and reducing headaches and time demands. So why do some investors choose not to work with a professional management firm? There are a few common pitfalls:
- Transparent fee structures with many hidden fees like markups on maintenance
- High cost relative to service level (sharing a significant portion of your real estate income while also feeling like you need to “manage your manager” is never a great situation to be in)
- Lack of sophistication and less-than-strategic approach to management and turns
- Misaligned incentives – some property managers charge a percentage of rent due rather than rent collected, leaving the property owner to suffer when the property manager fails at their job
- Poor communication, lack of big-picture perspective
Local property management – evolved
Great Jones recognized a need for truly professional residential property management services geared to the individual investor. By bringing together real estate pros and technology leaders, we’ve evolved property management into the powerful, strategic business asset it should be: streamlining your experience, protecting your property, and maximizing your returns.
In short, we make owning residential rental real estate as transparent and profitable as it should be. What sets Great Jones apart? Glad you asked!
- Our founders are technology leaders with backgrounds in building digital tools used by millions of modern consumers. We leverage technology and data to create efficiencies that positively impact your bottom line.
- Our service and operations team is led by real estate pros with over 30,000 doors and $4 billion in proven experience.
- Our local service teams are driven by the goal of making life as easy as possible for you and your tenants.
- Reasonable fees, no surprises – and no markups on maintenance, ever.
- A commitment to helping property owners thrive.
To learn more or get started with Great Jones, click here.