The Cheapest Property Management Service May Not Be the Best Deal
When it comes to property management, many landlords are tempted to go with the cheapest option.
After all, aren’t all property management services the same? So why pay more for one property manager over another? But all property management services are not the same and there are a number of reasons why low-cost property management services are often not the best deal.
1. They may not have the same level of experience.
Property management is a complex business, and it takes experience to do it well. Cheaper property management companies have to save money somewhere and often do so by employing fewer or less experienced staff. This can lead to problems such as:
- More extended vacancy periods, which means lost rent
- Poor tenant selection, which can lead to damage to the property and unpaid rent
- Ineffective maintenance processes, which can lead to further damage
- Unreliable advice being given to landlords
2. They may not offer the same level of service.
They may not offer the same level of service as more expensive companies. This can include things like:
- Less frequent property inspections
- Less responsive customer service
- Poor quality documentation
- Less attention to detail
- This can lead to problems such as:
- Tenants who are not happy with the property, which can lead to early termination of the lease and subsequent loss of rent
- Damage to the property that is not repaired promptly, which can lead to further damage
- The landlord being exposed to greater risk
- Poor communication between the property manager and the landlord
- Unpaid rent, which can lead to legal action
3. They may not be as financially stable.
Property management is a business; like any business, it is subject to risks. If a property management company is not financially stable, it may be unable to pay its bills, invest in its staff and useful technology or meet its obligations to landlords. This can lead to problems such as:
- Failing to stay abreast of legislative obligations
- Late payments for rent or repairs
- Inefficient management of landlords’ properties
Additional Tips for Choosing a Property Management Company
- Get referrals from friends, family, or other investors
- Interview several companies before making a decision
- Ask about the company’s experience, service, and financial stability
- Get everything in writing, including the terms of the management agreement
- Monitor the company’s performance regularly
It’s essential to look beyond the quoted management fee when selecting a property management service, as the cheapest option may offer significantly less value for money. Opting for a slightly more expensive company could help you avoid costly issues that might arise, potentially saving you thousands of dollars in the long term.