Imagine this, you've got a great tenant that always pays rent on time. Life is good. In fact, life is so good that you often forget about your tenant. Your only reminder is the owner's statement that comes in every single month. Except every time you see that statement, you see the management fee. And this causes you to ask yourself,
"Do I really need a property manager?"
It's a valid question. Because when life gets good, it's hard to imagine the bad. And when a property manager is working behind the scenes, it's easy to forget about the work they put in.
We understand. That management fee is not an inconsequential amount of money. However, a good property manager is worth their fee. And a great property manager will more than cover his fee in added returns. Here is a list of 15 reasons why you should keep your property manager when life is good.
1. Better Vendor Performance
One of the greatest benefits of working with an experienced property management company is having access to their extensive vendor list. A good property manager will have a vendor for every specialty in every city.
These vendors have been verified by the property manager, and they have spent years cultivating a good relationship with them. A good property manager knows how much a job should cost and can ensure that the owner is not getting ripped off.
Not only that, but a property manager knows exactly who to contact when a tenant calls in the middle of the night claiming that, "My windows exploded" (true story)...
2. Additional Insurance
Good property management companies have an insurance policy that covers errors and omissions. This policy covers most accidental mistakes that a property manager might make. For example, if a property manager gets sued for accidentally violating fair housing laws, there is a good chance that the insurance company will step in and help pay for the lawsuit.
A typical landlord that is operating without a property manager does not have this level of insurance. Therefore, they are exposed to more risk when dealing California's complicated legal system.
Typically, a property manager will be covered by his own errors and omissions insurance when he makes a mistake on behalf of his client. This provides the client another level of shielding from unnecessary risk.
3. Buffer Between Tenant and Owner
Today is a sad day. Unfortunately, today is the start of the eviction process with one of my tenants. The tenant has been in the house for two years and has been a relatively good tenant. They paid their rent (not always on time) and did not cause excessive property damage.
Nonetheless, February's rent never came in. The tenant promised to pay multiple times but that never happened. The promises were nothing but hollow lies that were meant to lead me on.
A good property manager can spot these hollow lies from a mile away. The best part is, the owner never even has to get involved. This creates a buffer zone between the tenant and the owner.
At the end of the day, a rental property is an asset. It is nothing more than an investment that must perform. If the investment does not perform, the owner would have been better off keeping the money and not ensuing risk. Ultimately, without this buffer zone it can be difficult to make the choices that are necessary to keep the investment performing.
4. Integrated Collections Agency
Speaking of evictions, most property managers work closely with collection agencies such as Fast Eviction Service. When the rent does not get paid and an eviction is started, property managers have a procedure for that. A good property manager will be able to walk the owner through the process from beginning to end.
We have found that a good property management company will be able to get back more money after an eviction than an owner acting by himself ever would. A property manager that utilizes an integrated collections agency is an owner's best bet for getting paid.
5. Local Presence
Many people underestimate the value of a property manager being nearby. Many people are also unaware of tenant's tendencies to exaggerate.
"OH MY GOSH! MY APARTMENT IS FLOODED!!!"
This is a pretty typical call that we get on a monthly basis. Sometimes the apartment is legitimately flooded. For example, I have walked into residences where the roof has literally caved in due to water damage.
I have also seen instances where "flooded" is grossly over-exaggerated. "Damp" might be a better word to describe the situation.
Without a local presence and employees that can be quickly dispatched to the "disaster area", emergency plumbing bills can add up quick.
6. Attorneys On Retainer
I'm not an attorney, and you probably aren't either. However, a good property management company has attorneys on retainer. A large number of California property management companies are part of the California Association of Realtors. They provide attorneys on retainer that a licensed agent can call at any time for any legal inquiries.
We live in a society in which everyone sues everyone else. Unfortunately rental properties are not immune from this. There are hundreds of laws that affect property managers and residential property owners. It is important to be aware of the laws that affect you and to have an attorney that can answer any questions.
7. We've Seen it Before
Sometimes good tenants go bad unexpectedly. One of my tenants got evicted after two years of living in the property. One day they just stopped paying rent. Fortunately, property managers have seen it before. They know what signs to look for and they tend to know when a tenant is lying.
A typical property manager is responsible for anywhere between 100 to 150 properties. They deal with tenants day in and day out. They know what to look for and they usually know when something is wrong.
From homeless squatters to residential pot farms, property managers have seen it all.
8. Fiduciary Duty
Property managers have a fiduciary responsibility to their owners. This means that the property manager must act in the owner's best interest. A property manager is bound by contract to treat that property as if it were his own.
Failure to act in accordance with this fiduciary duty can result in the loss or suspension of the manager's real estate license. This fiduciary duty facilitates a relationship that is based on trust. Once you trust your property manager, you can have confidence that he will make the best decisions on your behalf.
Imagine this, your rent check comes in and $500 is missing. You look at your owner's statement and see that the tenant's stove went out in the middle of winter. You can trust that the property manager made the repair with your best interest in mind. Afterall, a stove in the middle of winter is a necessary amenity to ensure that your high performing tenant stays happy and doesn't move out at the first available opportunity
In California, 28% of families speak spanish at home. If you are a residential landlord and you do not speak spanish, you could be missing out on a lot of great applicants. A good property management company will employ people that speak spanish on your behalf.
This ensures that your property will be occupied by the best tenants. There will not be a language barrier that prevents immigrants, who happen to be some of the hardest working people in California, from occupying your home.
10. More Aware of Landlord Tenant Laws
I know this isn't surprising to anyone, but laws are changing all the time. Every December, Mesa Properties studies all of the laws that are coming into effect in January. Those findings for 2019 can be found here. If you are interested in the 2018 version, it can be found here.
It takes a lot of time to research these new laws, and it's important to do so. The government doesn't sit down with you in person and explain the new changes to you, you have to figure it out yourself.
For example, in 2019, there is a minor tweak to the 3-day notice law that has major implications for landlords. This new law essentially changes 3-day notices to exclude weekends and holidays from the timeline. It also gives tenants more time to respond to an eviction notice.
This minor tweak isn't a big deal for a property manager that is aware of the new law. On the other hand, if a landlord is unaware of the new timeline and accidentally messes up by a few hours, the entire eviction procedure will be thrown out in court. The judge will have to allow the tenant to stay in property without paying rent, and the eviction procedure must be started over from the beginning.
11. Attract Better Tenants
A good property management company actually has the ability to attract good tenants. Most tenants know exactly how frustrating a bad landlord can be. Bad property managers can make a tenant's life miserable by unfairly withholding security deposits and always delaying necessary repairs.
A good tenant looks for a good property management company they can trust. For example, here is a 5 star review that Danielle left for Mesa Properties.
"I couldn’t be happier with Mesa Properties! Our property manager, Joshua, has always been very responsive to all of our inquiries! We’ve been here for a little over 3 years and for the very few issues we’ve had: we were responded to the same day and the vendors were contacted and at our house the next day. I’ve dealt with other property management companies and managers and I have to say hands down that Mesa Property Management is a great company and that Joshua is one of the best, friendliest, and very helpful managers I have had the pleasure of dealing with. I would definitely recommend using this company if I had a rental home, and I would recommend Josh as a property manager!"
A good tenant with a good job and good references has the ability to be picky about what house they live in and who their property manager is. Some tenants will be more comfortable dealing with a reputable property management company than a landlord with no online reputation.
12. Easy Payments
Many property management companies have an online portal system for both tenants and owners. Not only does this make it easy for tenants to pay rent, it makes it easy for owners to receive the rent.
At Mesa Properties, we pay owners on the first business day after the 15th. That gives us just enough time to collect all the rent and do the necessary accounting. Some companies like to keep the rent for well over a month, but we believe that is unnecessary.
13. Deposit Dispositions Done Right
When a tenant moves out, the landlord can use the security deposit to bring the home back to the pre move-in condition. California law says that the landlord must provide the tenant an itemized list of deductions from the security deposit in a deposit disposition.
This disposition must be very specific. And, the tenants security deposit can only be used to make reasonable repairs at reasonable prices. This disposition must be given to the tenant within 21 days of move out.
California is a tenant friendly State. Small court judges tend to side with tenants. Because of this, detailed inspections are necessary before a tenant moves in and immediately after a tenant moves out.
A detailed inspection report should give a property manager a visual on everything in the home. Mesa Properties uses zInspector's software to complete our inspections. A Mesa Properties inspection includes 360° photos, videos, and up to 250 still photos of the home.
Deposit dispositions are calculated by using the before and after inspection reports. The property manager analyzes the reports and deducts the cost of any necessary repairs. If the tenant has any issues with the deductions, the reports can easily be accessed.
If the tenant still has issues with the deductions taken from the security deposit, a judge can easily consult both reports and decide whether or not the deductions were fair or not.
14. Safety Inspections
Mold is a landlord's worst nightmare. The nasty fungus grows silently under the cover of darkness. And frankly, lots of tenants don't care. After all, it's not their house. They can just move out when the lease expires.
Mold is not the only thing to worry about. I've seen everything from pot farms to garages illegally converted into bedrooms. The point of a safety inspection is to catch these things before more damage is done.
Mesa Properties recommends a 6 month safety inspection for most rentals. By sending a trained inspector into the home, things like a leaky sink can be caught before the mold even stands a chance.
15. Readily Available
Imagine this, you are on a beach in Hawaii. Little do you know that the city of Victorville is trying to get in contact with you. They are trying to tell you that your rental has excessive trash in the front yard.
But you don't have to worry about this. Your property manager has taken care of it.
Not having to take that call while you are on the beach is why Mesa Properties exists. Our job is to make your life easier. If you have any questions about how we can work together to achieve your goals, feel free to give us a call. Or, if you have any questions about our prices, check out our pricing page.