Most of us are familiar with the Pro-Con method of decision making. You know the one……… you're faced with a difficult decision so in order to "see" things a little more clearly, you take the time to make a list of Pros and a list of Cons. As you go through the list of each, eventually you begin to see what your decision should be. Well, when it comes to property management, in order to take one thing off your plate in hopes of making life a bit easier, we would like to provide you with the Pro-Con list here.
Cons of Using a Property Management Company
- The only real con, or disadvantage is that the cost of retaining a property management company can affect your profit margin. The cost of hiring a property management company can range anywhere from 5-20% of each month's rent with the average companies charging 8-10% of each month's rent. In addition, many will require the first month's rent as their first payment. If your goal is to have your tenant cover the mortgage through their rent check, you will need to factor in the added expense of the management company in order to determine its feasibility.
Pros of Using a Property Management Company
- Property managers are up to date on regulations governing tenant/landlord statutes. You, on the other hand, may not be up to date on these and therefore put yourself at great risk.
- Your property manager will establish the current market rental rate for your property. Rates are typically set on an annual basis so at the end of each year, your manager will be able to asses if you are still at the current market rate or if a change is in order.
- Property managers will take care of all the communication with the tenant. This includes the interview process and handling of all emergencies that may come up day or night. Yes, even the 3am calls.
- Your property management company will know how to properly screen prospective tenants in order to provide you with reliable people who will care for the property and pay on time. They will also handle transitions of a tenant moving out and a new one moving in including walk-through inspections, security deposits and new applications.
- When it comes to the maintenance and care of your property, property management companies have connections with local contractors and know who the reputable ones are. If maintenance and lawn care are written into the rental agreement, your management company has the ability to negotiate discounted rates with these local contractors to handle these needs.
As you can see, the Pros far outweigh the Cons when it comes to determining the advantages of using a property management company. Learn how to choose the right property management company in Toronto, Mississauga and the GTA.