Phoenix Property Management -Why Property Management virtually pays for itself.
There are generally two types of management clientele. The first being what we call a "forced landlord" this is the property owner who would much rather sell their property versus rent it however due to market conditions they are currently unable too. Secondly there are investors. These obviously are folks purchasing property for possible cash flow and future appreciation, tax benefits, and capital gains.
Now in either scenario utilizing a professional property manager generally will save this client several thousand dollars per year. Simply put think of this scenario.
A property owner lets call him "Bob". Bob thinks he will avoid professional management and advertise, lease, and manage the home himself.
First let's start with advertising.
Bob says "any idiot can throw an ad on Craigslist". With this said that is exactly what Bob does. Now once every week Bob re-posts his ad. Problem #1 is Craigslist alone does not lease homes; you need several other critical advertising sources in your arsenal to lease as quickly as possible. Problem #2, re-posting on Craigslist once per week has you at the top of page 1 for all of 20 minutes out of that 7 day period, literally. Now in our professional opinion you need to post every 48 hours religiously in order to have any luck on craigslist (this takes work most are unable to commit too). In addition you need to be listed within the rental MLS and posted on over 20+ other strategic rental sites.
Bob spends 60 days on craigslist posting once per week and spends over $3,000 in vacancy mortgage payments he possibly could have avoided.
IE: With professional management this property would be on craigslist however re-posted every 48 hours, in addition to the rental MLS, and over 20+ other very critical rental marketing websites. Very possibly bob could of saved a minimum of $1500 of that $3,000 in vacancy expense. That alone pays for management.
Now let's discuss the lease:
Now after 60 frustrating days Bob is so desperate to lease the property, he decides to accept an application despite the fact that the prospective tenant did not provide adequate employment info. She says she works for her "uncles plumbing business". Bob decides to download a free lease online and draft his own lease (please don't do this by the way)! He drafts the lease in the best fashion he is capable of. By the beginning of the 3rd month the tenant emails Bob and explains she will be unable to pay rent on the first however will be "getting him the money asap" Well our friend Bob spends the next 45 days attempting to track down last month's rent eventually deciding he must get professional help.
Now in this example, Bob wasted initially an estimated $1500 on possibly avoidable mortgage expense in addition to loosing an additional $6,00 0 (four more months of vacancy due to the fact that Bob had to evict this tenant, pay his mortgage, re-advertise until leased again) What a disaster! I think we would all agree paying a professional property manager would of pay for itself many times over here!
Phoenix Property Management can be full of complexities. Feel free to contact our office at 480.588.8356 Press Option 1.