Whether you’re just getting into the Detroit rental market or you’ve been investing in rental properties for some time, you probably already know that effectively managing your property takes a lot of time and energy. As you start adding more properties to your portfolio, you’ll quickly find that you’re spending more time protecting your investments. While there’s certainly nothing wrong with being actively engaged in your Detroit real estate investment, one of the most alluring aspects of being a landlord is the ability to earn passive income. If you want to expand your real estate investment business but don’t want to spend all your time managing and maintaining the property, working with a property management company offers a host of benefits.
Gathering and Using Market Data
A professional property management company doesn’t only get involved once you have a tenant in the property. Thanks to the resources that these industry experts have at their disposal, they’re constantly watching the local market to get a better understanding of local rental rates. While you can certainly do a quick internet search to find out the average rental rate in Detroit, a professional property management team will get detailed information about individual neighborhoods. This type of information is incredibly important, as your price point needs to be in line with comparable properties. If you set your monthly rental rates too high, you’ll have a hard time filling vacant properties. Conversely, if you set prices too low, you’ll be cutting into your profits.
Advertising Your Property
Vacancies are an unavoidable part of real estate investing. No matter how well you maintain your property or treat your tenants, people will eventually move out of your property. In the past, landlords could get by putting a “For Rent” sign in the front yard, but in today’s competitive market, you need to be able to set your property apart from the rest. Property management companies have advertising specialists who know how to target their ad campaigns based on local market data. While you can certainly make a social media post about a vacant property that you own, you’ll find that a professional property management company offers better advertising options, which results in a better return on your investment.
The Importance of Tenant Screening
Finding potential renters is great, but finding the right renters is the lifeblood of any successful real estate investing business in Detroit. Tenant screening is a crucial part of finding success in the world of real estate investing. The tenant screening process involves an initial application, a credit check, employment verification, and much more. Not only are there a lot of legal components to this screening process, it’s also incredibly time-consuming. Do you want to spend time on the phone verifying references from past landlords for every applicant? Do you have time to run a credit history on your applicants? Property management companies handle the tenant screening process for you, allowing you to focus your energy elsewhere.
Managing Tenant Relationships
Tenant relationships are perhaps the most important part of a successful real estate investing business. While there’s certainly nothing wrong with having friendly relationships with tenants, it’s important to remember that it’s also a business. You’re the owner of the business, and your tenants are your clients. There are plenty of issues that arise over the course of this landlord-tenant relationship, and having an experienced property management company in your corner is a powerful resource. Property management companies handle routine maintenance and any emergency repairs that need to be performed along the way. This is much faster and more cost-efficient than trying to handle the issues yourself or hiring someone to handle each issue that comes up.
Your property management company probably doesn’t have a team of service professionals on hand, but they do have relationships with plumbers, electricians, and HVAC contractors. Those relationships are great news for you as a landlord. You don’t need to spend all your time combing through reviews, gathering information about a contractor’s insurance status, and going over estimates. Let a property management company handle those things for you.
Meeting Legal Requirements
Being a landlord involves a lot more than buying a property, getting it ready for tenants, and signing a lease. There are loads of legal regulations in place that dictate every step of the process, from the tenant screening process to the end of the lease. There are even laws that govern maintenance, repairs, and improvements. It’s highly unlikely that an investor knows the intricacies of these laws, which means it’s important to work with someone who does. A property management company can put the right processes in place to make sure that you’re meeting state and federal laws as a landlord. This not only protects your reputation, making your properties more attractive to potential tenants but also helps protect you from litigation and fines.
Collecting and Depositing Monthly Rental Payments
If you own one Detroit rental property, it may be easy enough to collect the rent every month, make a trip to the bank, and deposit your money. However, when you start to add multiple properties to your investment portfolio, rent collection gets more complicated. Additionally, it’s important to keep tedious financial records, regardless of the number of properties you own, to make sure that you’re filing your taxes correctly. Finally, there’s always a chance that there’s a dispute concerning the rent, and legal recourse may be your only option. With all of these circumstances in mind, it’s worth working with a property management firm that can collect and manage your rental income on your behalf.
Choosing the Right Property Management Company in Detroit
Most people who start investing in Detroit rental properties do so because they want to earn passive income. At Upside Investments, we believe in letting you be as involved as you want to be. If you’re looking for a proven property management company that understands the Detroit market, we’re here for you. Contact the team at Upside Investments today to find out more about how we can help you effectively manage your Detroit rental properties.
