The value and cost of Property Management v/s Self-Management
While the easiest equation of a property and rental management would be the rental income minus related expenses, this formula is mainly wrong as it doesn’t include any landlord duties or energy values.
Besides, this is among the main reasons why investors choose to hire a property and rental management company to manage their real estates: they have neither the time, the desire nor the energy to manage their distribution or maintenance.
So, are you still considering self-managing your unit or are you thinking about delegating this service to professionals?
THE REAL VALUE OF HIRING A PROPERTY MANAGEMENT COMPANY
If a lot of investors have found success in self-managing their rental properties and cutting down on expenses, you may wonder about the advantages of hiring a property management company like HORIZON Properties.
Before deciding what option is best for you, let’s take a look at all landlord duties that comes with property and tenant management; or in other words, duties that you or management companies will have assigned:
Handle maintenance & repairs and cleaning as needed: A glass broke. The kitchen tile cracked. The bathtub tap doesn’t close properly. The A/C is sinking and might need servicing…. Owning a property certainly comes with its amount of maintenance and day-to-day operations: identification of problems, coordination of arrival and supervision of third parties or service workers, daily cleaning of your property..
Analyse to determine rental rates and optimise your rental income: Analyse the real estate market, the concurrence and the demand, all to determine the best monthly rate of the unit.
Advertise your Property: Finding your next tenant involves more than just putting an ad up on online platforms, Facebook or Airbnb. Market units come along with lots of enquiries and property visits as well as negotiations from prospective tenants.
Organise Property Visits: Trying to find a time slot for prospective tenants who want to see the property, but seems like the only available time is on Tuesday morning at 10 am (the same time as your weekly meeting and there is no way you can miss it) or on Sunday afternoon when you’d thought you be taking a nap… Also, remember visits can be endless and can last hours. Tenant Screening: Completing tenants screenings to assess the likelihood they will take great care of the rental property and fulfil the terms of the lease. Prepare & Enforce the Lease: Writing the lease agreement and being the one ensuring the tenants follow all the terms during the rent - else you might need to move forward with an eviction.
Tenant Relations: Not only you will need to respond to emergency maintenance from your tenants, but sometimes you will also have to file tenants complaints & moderate issues between tenants.
Collect Rents: You would think this to be the easiest duty... but what if your rent doesn’t show up on the discussed and agreed date?
PROPERTY MANAGEMENT VS SELF-MANAGEMENT: WHICH IS RIGHT FOR YOU?
Time & Control:
Self-management means that you not only own the property but also handle the maintenance of the property. You will be the key person for your tenants and thus, they will always refer to you when paying rents or addressing issues.
There are indeed a few potential advantages to self-management if you have the time and expertise necessary to do it well, but if you don’t, then you may seriously consider the option of hiring a property management company like HORIZON Properties.
Self-management also gives you a higher level of control over daily operations as you'll be the one making all the necessary decisions.
Network & Expertise:
Property Management specialists are usually connected to
third parties specialised in real estates and professionals of maintenance services: landscaping, pool, electric and plumbing services...
real estate agencies and professional groups, so very up to date in terms of the market demand and price. You would not want to be listed too high or too low on rental platforms right?
Cost & ROI:
Property and rental management require a lot of time thus is not a free service; so when considering hiring a company to handle landlord duties, the question you have to ask yourself is, how much do you value your time?
Property management companies charge between Rs 5,000 and Rs 8,000 each month to handle all of the issues listed above.
This is a considerable amount and it directly impacts the profitability of your property. On the other hand, it frees you from a certain mental burden as well as from your time - which you can then dedicate to other activities.
HOW DO I CHOOSE A GOOD PROPERTY MANAGEMENT COMPANY?
You may want to shortlist all property and rental management companies of Mauritius and compare them to each other: years of experience, size of the business, number of units already under management are all interesting indications of the credibility of the company.
Learn more about property management here and if you have any other questions, feel free to contact our Property Team at firstname.lastname@example.org.