5 reasons why a property management company makes you money
Rental property sucking up your time? Thought you bought an investment property but you really bought a job? In this article, we list 5 reasons why a good property management company in New Jersey can make you more money.
As a rapidly growing property management company, our property management systems have helped real estate investors grow their portfolio and become wealthier without having to break a sweat. Our clients understand the benefits a great property manager can have on their New Jersey rentals and now you will too.
The first way a property management company in New Jersey will make you more money:
ECONOMIES OF SCALE THROUGH ADVERTISING
In business, it's well known that the more of a product you can buy in bulk, the cheaper you will get the product. That goes for doors, shirts, sugar and yes, even property management. In our business we have so many properties that we will completely outspend a local Mom and Pop landlord when it comes to marketing the property. You might put up a For Rent sign or advertise on Zillow for your rental (and that can work). Your rental might get 50 views in a month. Our property management company uses so many various advertising channels that we will wind up getting 500 views for that same property. That allows us to rent the property faster, which means more money in your pocket. That is one way how you increase your cash flow.
The second way a property management company in New Jersey will make you more money:
ECONOMIES OF SCALE THROUGH VENDORS
How many vendors do you have for your rental property? 3? 5? We have 50. Yes, 50. Have you vetted your vendors? Do you know if Carlos has insurance? Maybe Jim actually went to prison for a decade and forgot to tell you. We aren't making that stuff up. It happens and we have seen it happen when we vet potential vendors. When you hire a property management company, your risk goes down because it is our job to make sure qualified people are taking care of your property. Because we have so many properties, we have a constant flow of work coming in for our vendors. If we call the same plumber 50 times a year do you think he will give us better pricing for a job than if you call him once? That same logic applies with exterminators, handymen, HVAC repair, etc. Because of our property management business we are able to get repairs done quickly at affordable rates and we pass that savings on to our clients.
The third way a property management company in New Jersey will make you more money:
Didn't think of this one did you? Well, I am here to tell you that towns love nothing more than to trip up a landlord because they didn't register the rental property correctly. Every town is different with regards to being compliant. Some towns require an inspection every time you have a new tenant, some towns don't. Some towns want a fire safety inspection done each time a new tenant takes over, some towns need the property registered with the town. Any screw up and you are paying a nice sized fine. Wouldn't it be nice to transfer that risk to someone else? As your property manager, if we don't do what is needed to properly register the rental, that is on us! By hiring a property management company to take care of your New Jersey rental properties you spread that risk to the property manager. Every town is different and if you own rentals in multiple towns, you need to know this or it will cost you.
The fourth way a property management company in New Jersey will make you more money:
KNOWING THE COMPS
If you don't know what the rents can be on your rental property, you are costing yourself money. Being able to rent so many properties in so many towns, we have a built in database where we can tell our clients how much a house or apartment can rent in a certain part of town. It makes a big difference when you rent out your house for $2600 because you wanted to be a landlord and we know it can rent out for $2850. That difference compounds very quickly. We have several clients where we have paid for our services practically overnight by letting them know how much higher rent can go and then making it happen. A good New Jersey property management company can tell you this. This is why we stick to 3 counties that make up about 60 towns. We have become experts in these areas and it allows our clients to make more money on rents, which equals a higher value on the property, which equals more wealth creation and a fatter ROI when they finally sell! (PS, we sell houses as well and do so for a lot of our property management clients.)
The fifth way a property management company in New Jersey will make you more money:
Many people do not understand time value so let me try to explain. We all value our time. How much is your time worth to you? How much would you charge if someone asked you to do a task for them? Better put, do you know how much you make per hour at work? If your time is valued at a high dollar amount per hour then why on earth are you trying to self manage your properties to save a few hundred dollars a month? Spending all day to fix a leaking faucet because you had to go to Home Depot three times did not save you the $75 labor charge that you would have paid us. You spent ALL DAY! That's time you lost where you could have evaluated other real estate deals, or maybe spent time with your spouse and kids, played basketball or whatever else you enjoy doing in your free time.
Once you realize how much time you save not having to deal with the minutiae of owning rental property, it becomes quite clear that hiring a property manager frees up your time and allows you to focus that energy on more important tasks.
When you own a mutual fund do you spend all day figuring out how much TSLA, AAPL, V, UBER the fund should own? No! You pay a fund manager to do that and get you an updated price daily. The same applies with property management companies. You hire them to deal with the micro level decisions, you get a monthly statement and you focus on other ways to make money.
There are many other ways that a great property manager can make you lots of money but these are 5 that we wanted to share with you. If you think you are ready to let a property management company handle your New Jersey rentals, contact us today. We will help improve your cash flow and give you the freedom to focus on investing!