Property management is a great way to keep properties full of renters and well equipped with services. It keeps the owners as well as the tenants happy for a moderate fee. It allows for living in convenience. Property management can be handled by the property owners, or they can look for companies and people who will provide the services of property management. Honestly, this is usually the easier option and still allows for a solid income from the property.
People purchasing investment houses to use as rental spaces while having the property appreciate in value is increasingly common. But who wants to go to all the work of finding tenants to live in your house? Or if you don’t want to have a tenant in the house, and just want it to stay empty, who’s going to put in the effort to keep it well maintained?
That’s where property management companies can come in. If the owners don’t want to take care of the details, the property management company will do that part. Property management companies will pay for the space in different ways. While the owner of the properly can sit back and relax while they take in cheques.
Condo management is one of the best ways that property management companies can showcase what they do. They become responsible for the condominiums in question. “Condo Fees” are paid to the property management monthly to ensure that the condominiums are properly maintained and the people living in them receive basic benefits.
Apartment buildings can also provide opportunities for property management. Property management companies will work hard to ensure that there are more tenants to fill vacancies. They will either receive a percentage of rent, or they will pay rent to the owners themselves. These rents come with the agreement that the property management company can sublet at prices that are actually higher than the rent. This is how they make money while providing consistent income to the owners.
How Do Property Management Companies Help Create Money?
Finding tenants is really hard. Actually, we should amend that. Finding good tenants is really hard! Tenants who have the perfect combination of financial reliability and respect for the living space they are occupying can sometimes be difficult to find. So the property management company takes their share of the rental incomes. They can make their money in one of a few ways.
- Percentage - This is probably the most common method of paying for property management. The company gets a simple percentage of the rent paid out for the property.
- Fixed - This is a common method of payment for empty houses. There are no renters there, so for the property to be taken care of, a chunk set fee is paid to the property management company.
- Guaranteed - When there’s rental areas that are very in demand, it’s possible a property management company will actually pay the rent to the owners. They then sublet out to tenants at a higher rate. If rental changes in an area, they can make a lot of money with rising rates. If it falls, they can take some financial damage.