Property managers provide the operating muscle behind the scenes on a rental property. They are responsible for everything from scheduling repairs to staffing and overseeing the day-to-day operations of a property. It is difficult to determine how much money a good property manager can save you, but what they do behind the scenes is priceless when it comes to your bottom line. Therefore, here are six main ways hiring a property manager can mean more money from your real estate investments.
Better Accounting
A good property manager will provide detailed monthly financial statements for each of your Sacramento properties. When you hire a property manager, they take over the accounting duties so you don’t have to worry about it. If you happen to be out of state or on vacation, you can rest assured that your property management in Sacramento is working hard for you while taking care of your real estate investments. Besides detailing the financial performance of each property, they provide you with information on your cash flow as well as a year-over-year comparison of how the properties are doing.
Reduced Vacancy
When your property manager is managing vacant properties, they can be showing the properties to prospective tenants and secure leases for them before an extended vacancy occurs. When a tenant moves out and you need to re-rent that space, it creates more work and stress, not only for you but also for any tenants that you manage as well. In the same vein, when you hire a property manager, they will work on trying to find a good replacement tenant before the current tenant moves out. When you own an investment property and get a “notice to vacate”, it is usually difficult to find a qualified tenant that will be able to move in quickly. With proper management, this problem doesn’t occur.
Attractive To Investors
If you are looking to find investors for your real estate investments, an attractive marketing package is vital. A good property manager will ensure that so long as the properties they are managing are professionally managed and have a full complement of up-to-date tenant information, this package will be very attractive to so many different types of potential investors. By finding investors, they can also lower your risk because you will be able to move out of the financial picture and only deal with professional investors. It will save you both time and money in the long run and you will still have a much more hands-off approach to managing your properties.
Better Rent Collection
A good property manager can reduce free rent periods by potentially collecting the last month or two months’ rent upfront. This ensures that you are not missing out on extra income throughout the year due to unpaid rents. It also allows the manager to be proactive when dealing with late rent payment issues. A good property manager will have a strong relationship built up with their Sacramento tenant base, which gives them authority in negotiations if the need arises. A good relationship saves you time, money, and headaches, so why not hire a property manager to take care of this for you?
Better Returns On Your Investments
A good property manager can often assist you with higher rents throughout the year if they find that it is possible. If you are investing in Sacramento real estate, their job is to negotiate higher rents with your tenants so that your property’s value will increase over time. This means that when it comes time to sell the investment property, you can get more return on your investment because of all the hard work put in by the person managing the properties. This may also create a situation where you could charge higher rents and still be able to attract quality tenants. If you are having a rental property, make sure you understand that this is how you maximize your return on investment.
Faster Depreciation Deductions
A good property manager and a knowledgeable accountant could potentially get IRS approval for higher depreciation deductions on your investment property. Depreciation is the process of spreading out the cost of an asset over its useful life to determine how much you can deduct each year. You are allowed to depreciate any real estate investments, including rental properties.
If you have a rental property with several years of depreciation, you might be able to lower your tax bill by paying less in taxes. You can speak with your manager or accountant about depreciation deductions and how they could assist you in lowering income taxes on the properties that are being managed.
If you are looking to invest in real estate, chances are you will also have to look for a good property manager. They can indicate the difference between short-term gains and long-term growth. If you are still not convinced, make sure to speak with other investors in the area who have worked with a property manager before, and make sure to do your own research online prior to hiring a good property manager to take care of things for you.
