With vacancy rates bottoming out in many Canadian cities, the need for professional property management is becoming more apparent – especially amid recent media reports of the growing number of “tenants from hell.”
“Most people view property managers as an expense,” says David Bradica, a real estate investor and agent in Mississauga, Ont. “But the reality is that a good property manager will free up your time to expand your portfolio and save you money in the long run through the proper tenant screening and proper tenant management.”
Indeed, Bradica says a professional property manager will oversee a number of areas that commonly land investors in hot water.
The most important centres on the tenant. Property managers will deal with small tenant issues, such as late rent payments, and larger issues, such as an eviction.
“Usually when you hear the horror stories it’s because the owners themselves are not professionally prepared to deal with those situations, but a property manager is,” Bradica says. “The money you pay (to a property manager), you can look at it as an insurance policy against a difficult situation.”
The property manager also screens tenants and can make a more informed decision based on his or her experience and with no emotional attachment to the property.
“Sometimes even the best screening can put a tenant in who hasn’t been forthcoming, and even good tenants sometimes can get into bad situations,” Bradica says, pointing to cases of divorce or sudden illness. “(In using a property manager) not only will your likelihood of a bad tenant go down, in the chance of something happening, they’ll also deal with it faster.”
Professional property managers are also more familiar with the legal aspects of owning a rental property and have the time to work with the Landlord-Tenant Board if anything comes up. It’s a smart business choice, Bradica says.
“By putting professional property management in place, you’re running it like a business and you’re providing yourself leverage to expand that business,” he says.
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Professional property managers aren’t a money pit, says a seasoned investor, arguing the service is actually a crucial part of a successful rental business.