Harvard research found that real estate investments are valued at over $230 trillion
When you think of rental property management, what's the first point that springs to mind?
Property maintenance is instrumental in ensuring consistent rental income:
- It helps secure lease renewals
- Maintenance is vital to the tenant experience
- It's critical for property marketing
- Property maintenance is necessary for compliance
- It keeps tenant turnover rates low
However, one area of confusion for new real estate investors is payment. Specifically, are property managers responsible for paying for maintenance services?
The short answer is "no," but how does the payment process work?
Here's a more in-depth look into the process.
What Property Management Responsibilities Are You Paying For?
When you hire a property management company, you're paying for the company's services. You may hire a company for a select service or a full-service option.
A full-service property management company offers the following:
- Property accounting
- Marketing services
- Maintenance (including repairs and upgrades)
- Tenant screening
- Eviction services
- Application processing
- Rent collection
- Lease management (with repair policies)
Some property management companies, like PMI Aspire, also offer estate management services for empty properties. These properties may be in probate or recently inherited.
How Do Owners Pay For These Services?
Property management services are considered an expense. Property management costs come out of the investor's revenue. Everything left over after expenses is profit.
Property managers work with a vendor network of local services, from landscapers to roofers; these servicers invoice the property manager who bills the landlord. This process is called outsourcing.
A monthly service, like rent collection processing, may be automatically deducted from an account.
Cutting Property Management Costs
While property managers themselves don't pay for rental property repairs, they can help landlords save money on property management costs.
Property managers who manage multiple properties for the same portfolio are better positioned to get discounts for that landlord or investor group. This strategy works best when you're in a contract with a service. If a property manager needs landscaping for a group of new homes, they're more likely to get a discount.
Of course, paying invoices on time increases the likelihood of discounts. The same rule applies when buying cleaning supplies in bulk or other property management supplies.
Preventative Rental Property Management Strategies
One of the most important property manager duties is to stop costly repair issues before they start. This point speaks to the value of routine property inspections.
A tenant may not always spot a maintenance problem that could worsen in time. A property manager knows what to look for in these cases. For example, they may be able to identify a faulting wiring issue or a potential water damage hazard that would worsen after a storm.
Manage Rental Property Repairs Effectively
While landlords are responsible for paying for repairs, hiring an experienced rental property management company will save even more money on maintenance. Consider the above points about vendor networks, bulk discounts, and inspections when choosing a property manager for your portfolio.
At PMI Aspire, you can count on a team of industry veterans committed to maximizing your property value. We're licensed brokers with over a decade of experience in Colorado property management, including consulting.
Enjoy a free rental analysis or schedule an appointment to talk more about your goals.
