As a property investor or landlord, your goal should be to maximize your overall return on your real estate investment while minimizing your risk and liability. While it may appear counterintuitive to some, hiring the services of a professional real estate management firm can significantly improve your long-term returns and minimize your risks.
If you price your rentals too high, the large vacancy periods may result in a lower overall yield. On the other hand, if you price them too low, you are not making the most from your real estate investment properties. Mispricing will hurt your returns either way.
You need to get as close as possible to the optimal price point where you can maximize your revenues from your rental property. This is where a proven property management and investment company will use their vast experience and market insights to help you price your rentals efficiently and maximize the ROI and IRR.
Experienced property management firms know how to market your property in order to attract the best-qualified applicants and bringing down your vacancy rates. Each unrented day for an apartment means loss of revenue for you. As an individual landlord, you may not have the kind of marketing prowess and brand building skills that your property manager will bring to the table. Great tenants are looking for specific offerings and it’s important that you know how to deliver that to the market.
Property management firms are seasoned enough to have heard a thousand false promises and sob stories from dubious applicants and have evaluated countless credit reports with a fine-tooth comb. This is a strong skill, which only comes with vast experience and exposure.
As an individual landlord, you are not likely to have that level of professional tenant screening expertise. Over time, the quality of your tenants will impact your bottom line in a major way.
If you individually manage your property, the regular repair and maintenance jobs are going to cost you more. At the same time, the cost of materials involved would also be higher. Property management firms, on the other hand, operate on a larger scale and deal in high volumes.
As a result, they are able to obtain significantly lower rates for both services and materials. In the end, they would save you money through the economies of scale that they can command.
Whether you have one or several real estate investment properties to manage, if you try to manage them yourself, you may end up spending a lot of your valuable time which you might have productively employed elsewhere. When you consider the hidden opportunity costs of self-management of your property, you can find serious value in your decision to appoint a property management company.
Experienced landlords with multiple real estate investments know that profits are only half the equation. To determine real returns over time, you have to consider the potential risks. This is where knowledgeable property managers can ensure that you remain insulated against the risks of claims and lawsuits.
They will diligently maintain records and abide by the local rules and regulations to protect your interests. These benefits will not show up in your financial statements, but they make a key difference in your long-term returns on investment.
At Optum Real Estate Management, we’re obsessed with managing and maximizing our client’s ROI. Experience the Optum difference today. Call us at (949) 478-4695 or contact us online to schedule a consultation.