One of the most significant advantages for curtain tailors of having a property manager in place is that they not only do all the actual management for you – a selection of tenants, completion of the appropriate paperwork, inspections, etc. – but they also do much of the accounting. From most of the property managers, curtain tailoring employees would get a monthly statement detailing the gross income, the expenses incurred, their commission, and the net amount transferred into their bank account. This makes for straightforward accounting. Property managers’ mostly charge anything from 4-15% of the rental income to manage your properties. Usually, the bigger your portfolio, the lower the commission rate they will settle for. Another advantage of using property managers is that the less pleasant work of evictions, notices of rental increases and notices requiring tenants to remedy shortcomings in keeping the property clean and tidy, no longer need to be handled by you personally.
Just like with the selection of a property to buy, or the selection of a real estate agent to work with, or the choice of a tradesman to work on your properties, it is somewhat of a numbers game. It may not always be so easy to change agents, especially if curtain tailors have bought the property with the tenants in it. Let me tell you about an experience I had with an agent in the UK. I bought a property with tenants in it, and by extension, I got saddled with the agent who had initially been rented it to them. As it was my very first investment property, I didn’t want to have an agent manage the park for me; I tried to manage it myself. But it wasn’t that easy. The agent kept their security deposit because he had found the tenants and even though it was my property, he demanded that they pay the rent to him and then on top of that, he withheld that rent and didn’t pay it to me. I had no legal recourse unless I evicted the tenants, which ultimately I had to do. It was all very amicable as the tenants knew what was happening.
Just because you use top estate management services to look after one or several properties, it should not be a foregone conclusion that you always use the same firm for any subsequent properties you acquire in the same area. The same applies to agents. If the property manager does not respond quickly to repairs or complaints from tenants, you can lose your tenants and your rent very quickly. Let me tell you about a situation I had when I first went into the property investment business in the UK. I had some tenants move into one of my properties, and they had signed a lease agreement and paid a month’s rent in advance as well as a security deposit. I had turned the management of that property over to an agent with the understanding that my tenants would call them with any problems that arose and they would act on my behalf immediately upon hearing about any issues that needed to be resolved.