There are plenty of multifamily investors who make such investments because they desire to run it as their own business and manage the day-to-day activities with full awareness of what it entails. Yet, there are also investors who get into the business without being fully aware and make the assumption that higher returns naturally come with self-management. After all, the fees associated with hiring a property manager must account for a significant chunk out of revenues, right?
While it’s definitely true that hiring a property management company is an added expense, it’s proven itself time and again to be the type of investment with significant returns. It often saves investors considerable amounts of money, in addition to helping secure ongoing income.
Just a few examples of the types of savings investors may enjoy with the help of a property management company include:
Reduce vacancy rates – One of the biggest challenges of managing a multifamily property for many owners is keeping maximum occupancy. And, as can be surmised, any unit sitting vacant is not earning income. Another way to look at this is just like money going out the door because mortgage and additional shared utilities still must be paid on that space.
Hiring a property management company can ease that burden. They not only have resources that can help in determining the best, long-term prospective tenants, but also potentially have access to better and more effective marketing tactics to turn units quickly once vacated; narrowing the timeframe in which financial loss occurs.
Economies of scale – It is defined in microeconomics as “the cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.”
In other words, a property management company, which manages a number of properties in the same area, can leverage far better rates on necessary services than an individual owner of a single property could achieve. This includes lawn service, HVAC maintenance and repair, roofing services, marketing and advertising, and more.
Time is money – Of course, you can’t forget that your own time is money, and you lose it when time is spent inefficiently. The time you spend managing a single property may not be as effective or efficient as the same time spent by an experienced management company with a team of professionals.
Ready to realize savings through a partnership with a professional property management firm? Contact Class A Management today. Call 817-295-5959 or send an email to email@example.com.