Why hiring a property management company pays for its self

Generally speaking there are two types of landlords today. There are those who were "forced" into being a landlord, because they would much rather sell their home, however  they are unable to do so because of the current market conditions. The other type of landlord is the investor, who is looking to buy houses at a bargain and rent it out for cash flow or to sell once the market rebounds. In either case professional property management is something that will pay for its self.

Let me show you an example of what I mean by professional property management paying for itself. Lets take a landlord and call him John. John has a property that is 20 miles away from the home that he is currently living in, and his mortgage payment is $1000 per month. The home should rent for $1250 per month.

First lets start with advertising

John says "I know how to post things on craigslist", and in fact John has sold many things using craigslist. with this said that is exactly what John dose he makes a detailed ad for his property and sits back and waits for the phone to ring. Problem # 1 with craigslist is that craigslist is only one small place that potential tenants are looking for rentals online. To be successful you need to be on the MLS and post to the 20+ other rental sites on the web. So every week John re posts his ad on craigslist hoping the phone will ring more this week. Problem # 2 with re-posting once per week is that your ad will only be on the first page for about 20-30 minutes per week. To be successful you need to re post your ad every 48 hours which takes time. In the current market rentals are taking between 30-60 days to fill. Lets say it took John 50 days to fill his rental that cost him $2000 in mortgage payments.

Second lets look at showing the property to potential tenants

John has gotten a few calls on his property and he is excited so he schedules a time to show them the property. The first appointment he has is at 1pm on Saturday, he drives the 25 miles to the house and arrives at 12:45 to wait for the potential tenant... 1:20 rolls around and the tenant has not shown up... and finally at 1:30 the potential tenant calls John to let him know she will not be able to make it after all and wants to take a look at it at 5pm instead. Disappointed John agrees to meet at 5pm and drives the 25 miles back to his home only to drive back a few hours later. By now I think you get the point that not everyone who wants to look at the property will show up. Generally you will have to show a property to an average of 5-10 potential tenants before you get one qualified applicant.  All said and done John put 480 miles on his car and spent $95.76 on gas to show his property, not to mention the amount of his personal time he invested.

Now lets discuss qualifying a tenant and writing a lease

After 50  frustrating days of meeting people at his property and fielding phone calls John is desperate to find a tenant for his place so he decides to accept an application for a lady who says she works for her brothers construction company. John decides to download a lease from the internet and to tweak it to make it work for his situation. The tenant is good and pays on time for the first 7 months and in month 8 the tenant calls John and says she will be a little bit late with the rent payment. John spends the rest of the month trying to track down the rent before he decides he needs to get professional help.

Now in this example bob is out the cost of the professional help plus the $1000 mortgage payment that was not paid by the rent. Also John spent $650 for professional help with the eviction, which would be covered by the eviction assurance plan if he would have gone with property management services from iDeal Realty & Management. Also now he must re advertise and show the property all over again and wait for a new tenant.

Lets total up the Costs and see how much John saved... or could have saved

Renting the property himself cost

• $2000 - Mortgage payment before finding a tenant
• $95.76 - Gas to drive to showings
• $1000 - Mortgage payment when tenant fell behind
• $650 - Professional help with the eviction
• Having to re advertise and going through the process to find a new tenant
• Total Cost - $3745.76

Using a professional property management company (iDeal Realty & Management)

• $695 Marketing fee (paid when a tenant moved in) utilizing MLS and 20+ websites
• $10 set up fee
• $75 per month Management fee
• $10 per month Eviction Assurance (exclusive to iDeal Realty & Management)
•   Not having to invest any of your time or energy into the property and having a tenant that was properly qualified living in your rental
• Total Cost - $1,715.00

So as you can see professional property management really does pay for its self in the long run.

If you are in need of professional property management give the pro's at iDeal Realty & Management a call today!

iDeal Realty & Management 

9051 W Kelton Lane, Suite 10

Peoria, Arizona 85382

623-201-3544

www.idealrealtyaz.com