One of the best things about growing your real estate portfolio is the independence it affords. When your properties are well-managed and producing steady returns, your income is virtually on auto-pilot—or at least, that's how it was supposed to be. Once you've got a few Richmond investment properties under your belt, you know that "passive" income in real estate is a misnomer—but only if you're self-managing!
One thing that is helping countless investors in the Richmond area support their financial security and peace of mind is property management. First, let’s dispel a couple of myths regarding property management that have made too many investors work themselves to the bone.
"If I hire a Richmond property manager, I will no longer be in charge of my properties."
Nothing could be further from the truth! A competent property management company simply acts as the rudder directing your desires and intentions in the best possible way toward the best possible outcome. Their goal should be to assist you in growing your property investment portfolio—and you should always be in charge of the ship.
"All of my income will go to paying the property management company."
The typical fees for property management vary depending on many factors, such as location, property size, and the extent of services required. However, the number usually falls within a 10% and 12% range of the gross monthly rent for single-family homes. Depending on the property manager, they may even offer a discount based on how many properties are in your portfolio.
For example, a 10% fee for a property bringing $1500.00 a month would be $150.00. So, for what the average Starbucks lover spends on Pumpkin Spice Lattes in a month, you can take the headache out of managing your rental portfolio.
How to Choose the Right Richmond Property Manager
There are a lot of options out there when it comes to property management—but they won't all offer the level of service you need. So, how can you make the right choice?
First of all, decide what you are looking for in a management company. You’ll want to make sure the company you choose is reputable, local, friendly, and easy to deal with—and offers all of the services you need.
Here are some of the services that your property management pick should provide:
Aggressively marketing your Richmond investment properties
Fielding rental applications from prospects
Screening tenant applicants to protect your rental homes
Collecting rent and holding of deposits
Managing tenant relationships as your go-between.
A trustworthy Richmond property manager will also provide you with periodic and regular updates, all applicable tax forms, and access to your portfolio 24/7, among other offerings.
Investigating Your Pick
Once you’ve interviewed and potentially selected a company that you feel offers what you’re looking for, there are some significant factors to investigate about the way they do business.
Check the Fees
The right property management company in Richmond is worth their weight in gold; simply choosing the cheapest one out there isn’t always the smart move for your portfolio.
A wiser course is to confirm that the candidate will fulfill all of your needs and then investigate the fee. There is no pre-set rule or figure out there for what a property manager will charge. A higher fee doesn't always indicate the best available service, either: this is what makes digging into the services a property management company offers so important.
Sometimes there are additional withholdings that a property manager will make on your behalf, like holding a set amount of investor-provided funds in escrow to manage small repairs. They should make this known to you upfront as part of their pricing structure.
Check the Contract
Understanding the terms of your contract with any property management company in Richmond is paramount. An excellent property partner understands this fact and wants you to be informed and comfortable with the contract before you sign.
A few things that should be included in your contract are:
- Responsibilities and representation: This refers to what the property management company will be responsible for in dealing with your real estate portfolio.
- Contract termination: All contracts should include a clause for termination in case of unforeseen occurrences. A reputable company will usually allow for termination of contract within a specific number of days. While you don’t want to take unfair advantage of the management company, you do need to make sure you are protected in case of legitimate reasons to terminate the contract.
- Indemnification: Make sure that you fully understand the indemnification clause of your contract. This means understanding what the property management company is liable for under law and what you as the investor are liable for. For example, while the management company may be held responsible for its direct decisions, your contract may state that they will not be held responsible for the actions of third-party contractors—even if they are the ones that hired them.
Check the Resources They Offer
Putting your real estate portfolio in the hands of a reliable property management company in Richmond can make growing your long-term wealth much easier. One way to check on the quality of the services your potential property manager might offer is by investigating their website (they should have an online presence).
From their website, you should be able to access any of the expert resources a property manager is offering. One critical resource you should always see being offered from a prospective partner is a free rental analysis. This powerful tool uses cutting-edge market analysis to help correctly price your Richmond investment properties—so that you can earn maximum profit.
Of course, a rental analysis is just scratching the surface in terms of what your potential partner should be offering you! At Mission Realty Property Management, for example, we offer investors an entire library of our expert resources—absolutely free.
Why not give our free resources a try? If you've listed your property and screened your applicants, it's time to get your rental ready to rent! Downloading our FREE Make-Ready Checklist is your next step!