People tend to assume a lot of things about the realities of owning a rental property, especially when they first get started. There’s a learning curve that may surprise those who are new to owning property. They soon realize that managing their property, finding reliable tenants, collecting rent, keeping up with maintenance, and staying in line with legal and financial obligations is incredibly time consuming and more than they bargained for initially. Then they start considering property management in Fort Worth, but they have a hard time finding a really good company they can trust. Bigger Pockets, a Real Estate Investment website, talks about the dirty truth about property management only experience will teach you, and how to know what to look for in a property manager. After you read the following six commonly believed myths and the real truth behind them, you’ll know what to expect and if hiring a property manager is something that you should do to save you time, trouble, worry, and money.
Myth: Leasing Rental Properties is Easy
Fact: Property owners invest in real estate because they know it’s a smart way to make money. Unfortunately, they also tend to think that there’s not much work involved. Put a sign in the yard, post the home to Craig’s list, and the honest, reliable tenants will come running. That is a total myth. The truth is, the majority of homes stay vacant for an average of 52 days, and it can be even longer than that if your home is priced too high or isn’t ready to rent. Paying the mortgage on a vacant home is definitely not what you wanted to have happen. It’s crucial that you price your home well, update it so that it’s ready for move-in, and market it to your ideal tenant. Specialized Property Management in Fort Worth can lease your home for you and has leased most homes within 30 days of being on the market. We’ll perform background checks and debt-to-income ratio analyses on potential tenants to make sure they are reliable and trustworthy. We’ll also perform a property assessment, market the home on over 90+ sites, conduct all showings, sign the lease contract with the tenant, and collect the rent. The fee you pay us is well worth it when you consider the cost of an extensive vacancy and the value of your time.
Myth: You Should Save Money and go With the Cheapest Property Management Company
Fact: People think that all property management companies in Fort Worth offer the same services. This just simply isn’t true. Smaller fees usually mean fewer services and guarantees, or poor customer service. Most property management companies require a group of people to multi-task and complete all the tasks for all of the properties. This means that everyone in the group must be knowledgeable about all aspects of marketing, leasing, maintenance, evictions, accounting, inspections, and legal obligations. With a group of people multi-tasking on your property, you may end up with someone who knows what they’re doing, or the new guy who is still learning. There is no guarantee, but either way, they won’t be able to keep up with the best practices or give you the specialized attention your property needs. Specialized Property Management in Fort Worth uses a team of specialists who all have years of experience and are up-to-date on the latest protocols in every area. This means you’ll receive the best possible service and outcome in every situation and won’t be left wondering why nobody knew what to do.
Myth: It’s a Quick and Easy Process to Find a Tenant That Will Pay on Time and Take Care of My Home
Fact: This belief is very common and property owners tend to think that if a tenant doesn’t work out, they will be able to easily and quickly find a replacement. This is false. Placing the wrong tenant will cost you 4-6 times the monthly rent rate. If you don’t know how to identify falsified documents or be aware of red flags from tenants while you’re interviewing them, you could easily be stuck with a tenant who doesn’t pay their rent on time, or at all, damages your property in some way, or moves out without notice, leaving you in a bind. Specialized Property Management Company Fort Worth protects you and your wallet from having to go through any of this by heavily screening future tenants and making sure that their credit scores and documentation are real, that they’ll be reliable, and that they’ll pay their rent on time. If we weren’t there at the time you placed a less than ideal tenant and anything goes wrong, we can enforce rent collection and take care of the eviction process, but we can’t help you avoid the associated costs. The following example gives you an estimated cost breakdown of placing the wrong tenant:
EXAMPLE: $1,000 RENTAL
- Tenant fails to pay for one month $1,500
- Eviction court fees $500
- Additional days to evict $750
- Damage to the home $1,750
- Re-marketing vacancy time $2,250
- TOTAL COST $6,750
Myth: I Can Expect a High Enough Rent to Pay for My Costs Because My Home is in Great Shape and in a Good Neighborhood
Fact: So you took the time to update your home and make sure the schools were good and the neighbors were friendly. You should be able to charge enough rent to cover your costs right? Not necessarily. Most property owners discover that they have to lower their rent because the supply of rental homes on the market is greater than the demand and assume they can’t afford property management in Fort Worth. Unfortunately, the real estate market is indifferent to your expenses and “PITI” (Principal, Interest, Taxes, Insurance). In some cases, out of pocket costs are required to cover the expenses of the property owner since rent is not enough. On the bright side, owners can use their property as a tax strategy and/or receive large returns as the home naturally gains value in future years, and property management fees may be tax-deductible expenses from the IRS. Specialized Property Management can help you price your property in the best way so that your property doesn’t sit on the market and so that you can cover as many of your expenses as possible.
Myth: Handling Maintenance Requests is Simple: Answer the Phone and Send out a Reputable Repair Company
Fact: It’s actually not that simple. Specialized Property Management Company Fort Worth is educated on and has extensive experience with all the property code, local city ordinances, and Federal Landlord Laws that must be followed indicating what must be repaired by landlord vs. tenant. Judges have zero tolerance for property owners who claim ignorance of these laws, so you need to spend a significant amount of time either educating yourself or finding a property management company that knows what they’re doing. The laws have specific instructions for details such as communication between the landlord and tenant, and even what type of technician must perform the repair. If you, as the property owner, don’t take the correct steps to ensure those doing the maintenance on the property have the right licensing and insurance, and the worker does not follow code or gets injured, you are responsible for those costs.
Myth: Managing a Property Means Just Collecting Rent and Handling Maintenance
Fact: Property owners need to constantly be aware of liabilities involved with owning rental property via their insurance coverage and obligations to the tenant. You can either hire property management in Fort Worth, or you can try to stay up to date on all tenant and landlord laws, property code, Federal Fair Housing Laws, as well as local city ordinances that can change annually. Managing rentals also requires you to be an expert in marketing, real estate contract law, trust and escrow laws, accounting for tax purposes, collection laws, eviction laws, property inspection regulations, and much more. Here’s a guide from The Balance Small Business Blog on some of the additional responsibilities landlords have to their rental property and their tenants.
Keeping up with all of these things in addition to collecting rent and handling maintenance requires a skilled and experienced team. Let Specialized Property Management Company Fort Worth step in and take out the stress and headaches of being a landlord. Not only do we know what we are doing from years of experience, we are up to date on changing local policies and provide seven specialized guarantees to protect you. Our team of experts takes care of everything in exactly the right way so you no longer have to stress about simple mistakes or not knowing everything there is to know about property code in your area. Few people have the patience, knowledge, or legal understanding to self manage their rental properties successfully. Give us a call and see how we can help you save money and properly take care of your property by doing everything right the first time.