There is often debate as to whether Property Management is beneficial and worth the cost. In my opinion: it depends.
If you’re comfortable dealing with Tenants, in terms of collecting rent, handling complaints and maintenance issues, then you likely don’t need the support of a Property Manager or the associated cost. If you have the time and inclination, I believe that you should try to manage the property yourself for a period of time, as you’ll gain experience in the rental business and valuable insight into the challenges and rewards that come with owning a rental property.
But what if this doesn’t sound appealing to you? What if you’re already overwhelmed with work and family life? What if you have a difficult Tenant that’s driving you crazy? What if you’ve added one or two more properties to your portfolio? What if you don’t live near your rental property? What if you move to another city, province or country?
In these scenarios, hiring a Property Management company makes the most sense.
A Property Management company basically acts on your behalf and carries the burden of the day-do-day operation of the property. Within that, a good Property Management company can modify their service offering, depending on your specific needs.
Many Landlords don’t need or want full management but may need support in certain aspects of owning and operating a rental property, such as handling maintenance requests. Other Landlords want to own the property at arm’s length, meaning they really want nothing to do with the day-to-day operations.
Hire for the services that you need
So, what are some of the services and benefits that a Property Management company like East Vista Property Management provide?
Tenant Placement – Finding a good-quality Tenant is the key to success in real estate investing but can also be one of the most daunting and frustrating tasks that a Landlord can face. A good Property Management company follows a proven process and has the resources to focus on generating leads and vetting candidates. This greatly reduces your risk and the pressure to get the rent flowing quickly.
Tenant Response – Responding quickly and effectively to Tenant requests is also a key to success that is often overlooked. It’s important from a legal standpoint (and just good Customer Service) to respond to your Tenants and deal with their concerns or requests in a timely manner. A Property Management company has staff dedicated to handling these requests on your behalf. They also will have a network of contractors and skilled trades to handle any issue that might arise.
Rent Collection – You might think that this is the most critical service that a Property Management company provides, but I would argue that if you do a good job at Tenant Placement and Tenant Response, then Rent Collection usually takes care of itself. That being said, a Tenant’s situation can go off the rails and you need to act quickly when a payment is late or short-paid. A Property Management company has systems and processes in place to deal with Rent Collection on a daily basis, in terms of follow-up and serving of Notices. They are likely also using technology to make it easier for the Tenant to pay, using online platforms that also have reporting capabilities.
Maintenance and Fire Safety Inspections – Your rental property needs a certain level of maintenance for many reasons. Not only does it help to maintain and increase the value of the property but can also reduce repair costs in the long run. A well-maintained property is also more marketable and may command a higher rental rate when the time comes to find a new Tenant. Tasks such as checking and changing the Furnace Filter, checking the condition of the Dryer Vent and testing the Smoke Alarms should be done on at least a semi-annual basis.
Tenant Turn-over – Changing Tenants can be stressful, especially if the property needs cleaning, repairs or improvements in between. An experienced Property Manager can get things done in a short timeframe and also manage Incoming and Outgoing Inspections.
Support for non-resident Landlords – If you live outside of Canada, you may be required you to remit a Non-resident Withholding Tax to the CRA. A Property Management company can manage this on your behalf.
Minor Renovations and Improvements – Keep your property in great condition, with minor renovations and improvements. Not only does this affect the value of your investment over time, but also affects your income now. Well-maintained properties will command higher rental rates, while reducing Tenant Turn-over and vacancies. A Property Management company can coordinate the work and might be able to do it in-house, saving you the time and headache of coordinating everything yourself.
Legal support and Compliance – It can be difficult for a Landlord to fully understand the ins and outs of the Residential Tenancies Act, which governs the rental business in Ontario. A Property Management company has likely dealt with all sorts of issues and has gained valuable experience over time. They will also make sure that your rental property is operating in a compliant manner, in terms of dealing with Tenants and maintenance. Furthermore, if more serious issues do arise, a Property Management company has the resources to act quickly and decisively and usually has a Paralegal firm on retainer for guidance.
As you can see, the debate over the benefits of hiring a Property Manager really has no right or wrong answer. It really comes down to the needs and preferences of the individual. A good Property Management company will seek to understand these needs and customize their services accordingly.
