New to investing or a long-time investor, the proper management of your assets will be integral to maintaining a Profitable, Compliant and Headache-free investment. With the drastic reduction in real estate prices, more and more people are becoming 'investors.' Though I appreciate the fact that real estate can now be a sound investment and means to financial freedom for the 'everyman,' I can not stress the importance of doing things right! One way to ensure reliable tenants, foregoing legal issues, staying on top of repairs,and EVERYTHING else, is to hire a Property Management firm.How it works
Property managers take on the full responsibility of your property from inception. They will market your property for tenants and screen tenant candidates. Once filled, they are then responsible for 'managing' the daily operations of your property - from A to Z. Your tenant should not even have your telephone number. Management screens tenant calls for all concerns, and whatever the concern, they simply execute. Having handymen and exterminators on call. Additionally, they are responsible for keeping you as an owner in compliance, so landscaping, trash removal, recycling, and other possible fine-inducing issues are expediently taken care of. If this isn't brilliant enough, you can arrange rent collection and deposit services, so that your tenants virtually don't have to know that you exist. Not that we don't like our tenants, but staying neutral is hard with close, constant contact, and when forgo home is at stake, the tenant's included, things tend to get a little messy.
My favorite aspect of having a property manager has been in the eviction process. Though we try hard to screen and find the best tenants, peoples circumstances can change. Unfortunately with the job market being in its current state, financial futures are uncertain. In the event that something like this happens, and the tenant can longer afford their rent, and they are not budging when it comes to relocating, an eviction may be necessary. Your manager, if established, has done hundreds of evictions, understands the process well, and can ensure a quick and compliant process, where you don't even have to go to court. If you have been through this process, you understand that having someone do this in your place, makes it all worth it! That, and not losing sometimes up to 6 months of rent.
Boy, if I wasn't tactful, I would name them all here! Bad, bad tenants!
How Much Does It Cost?
Most management is paid as 10% of the monthly rental income on multi-family units. One month's rent is also typically held in escrow for repairs, and is replenished as needed. A marketing fee is also charged for renting vacant units - generally about $500/ unit, which is actually cheaper than utilizing a Realtor (sorry guys.)
On a 3 unit multi-family property in Newark (You know I love my Newark ;) ) you can expect to pay about $360/ mth. This is on a rent roll of $3,600. Yep, our newly renovated example only costs about $150,000 in Newark. Let's assume we put 10% down, our note is $135,000. That's a monthly payment of about $1300/ mth. Add our $360 management fee, and you gain $940/ mth on your worry-free investment. This allows you to free up your time and energy to explore other investments. Where do I get this Brilliant service you speak of?
LCH Property Management would be a perfect candidate for your property management needs. We have over 15 years of hands on experience, and have a focus on the Manhattan, Bronx, NY and Central and Northern New Jersey areas. We are not only managers, but investors and can plan accordingly. We are able to determine the signs of potential tenant issues and repairs to forego any additional stress on your investment. We would love to help! 877-Corp-LCH/ Management@LCHRealEstate.com