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According to the Mid-America Regional Council, 35% of households in Kansas City are rentals, making it a prime market for property investors.
Whether you're a new landlord or an experienced investor, one of the biggest decisions you'll face is choosing between rental management and tenant placement.
Today, we're taking a closer look into how each approach works, exploring their pros and cons, so you can determine the best path to maximize your rental success in Kansas City.
Overview of Rental Management
Rental management involves a company taking care of most, if not all, aspects of managing a rental property. There are three primary services rental management companies typically provide:
- Property Maintenance
- Tenant Relations
- Rent Collection and Financial Management
Property Maintenance
One of the main reasons people choose rental management is for the convenience of having someone else handle property maintenance. It includes everything from routine inspections to emergency repairs. Having a professional service manage these tasks can reduce stress and ensure that issues are addressed promptly.
Tenant Relations
Dealing with tenant issues can be time-consuming and challenging. Rental management companies often act as the middleman, handling everything from lease agreements to conflict resolution. It can be especially helpful if you have multiple properties or live far from your rental.
Rent Collection and Financial Management
Another key service is handling rent collection and financial management. Rental management companies ensure that rent is collected on time and can assist with setting appropriate rental rates based on market conditions. They also handle accounting and financial reporting, making it easier to track your income and expenses.
Rental management can be a valuable option for those who prefer a hands-off approach or need help managing multiple properties. However, it often comes with higher costs, which can eat into your profits.
Tenant Placement
Tenant placement is a service that helps landlords find and place tenants in their properties. Unlike full rental management, tenant placement focuses primarily on the tenant screening process and finding quality tenants for your property. This service can be appealing if you want to manage your property yourself but need help with the time-consuming task of finding tenants.
The tenant screening process is a critical part of tenant placement. This involves background checks, credit checks, and verifying employment and rental history.
The goal is to ensure that the tenant is reliable and capable of paying rent on time. Finding quality tenants is essential for minimizing the risk of issues later on. A thorough screening process helps in selecting tenants who are more likely to take care of your property and follow the lease terms.
Pros and Cons of Rental Management
There are three primary reasons to consider rental management for your property. They are:
- Convenience
- Expertise in managing tenant relationships
- Steady cash flow without much effort
Convenience
One of the biggest advantages of rental management is convenience. Managing a rental property can be time-consuming, especially if you have more than one property.
With a rental management company, you can offload the day-to-day tasks, such as maintenance requests and tenant communications, to professionals.
Expertise in Tenant Relationships
Another benefit is the expertise that comes with professional management. Dealing with tenants can be challenging, especially when issues arise. Rental management companies have experience handling tenant relations, from addressing complaints to enforcing lease terms.
They can often resolve problems more efficiently than a landlord managing the property alone. This expertise can also help you avoid potential legal issues that may come up during a tenancy.
Steady Cash Flow
Rental management can also help maintain a steady cash flow. With a professional company overseeing rent collection, you're less likely to face delays or missed payments.
They can also provide advice on setting competitive rental rates, ensuring that your property remains attractive to tenants while maximizing your income. Financial stability is one of the key reasons many landlords choose to work with rental management services.
Pros and Cons of Tenant Placement
One of the most appealing aspects of tenant placement is the lower cost. Unlike full rental management services, tenant placement typically involves a one-time fee.
After the tenant is placed, you don't have to worry about ongoing management fees. It can make tenant placement an attractive option for those who want to save money while still benefiting from professional assistance in finding tenants.
Greater Control
With tenant placement, you retain control over the day-to-day operations of your property. Once the tenant is in place, you handle everything from maintenance requests to rent collection.
Flexibility
Another benefit of tenant placement is the flexibility it offers. Since you're managing the property yourself, you can address issues directly with the tenant.
A hands-on approach can help build a stronger landlord-tenant relationship, making it easier to resolve problems as they arise. While this requires more effort on your part, it can also lead to smoother operations if you're willing to be involved.
Choosing Between Rental Management and Tenant Placement
If you own multiple properties, managing them all on your own can be overwhelming. In this case, rental management might be the better choice.
A management company can handle the workload, freeing up your time. On the other hand, if you only have one or two properties, tenant placement might be sufficient, allowing you to stay involved without feeling overburdened.
Availability for Hands-On Management
Your availability plays a significant role in this decision. If you have the time and energy to manage day-to-day tasks like maintenance and tenant communication, tenant placement could be the right fit.
It allows you to control the property while getting professional help with tenant selection. But if your schedule is already full, rental management offers a way to delegate these responsibilities without sacrificing the quality of service for your tenants.
The Best Property Management Tips
Choosing between rental management and tenant placement in Kansas City depends on your needs and resources.
Oz Accommodations, Inc. has been a premier corporate housing provider in Kansas City since 1992. And we've spent the past 3 decades perfecting systems for managing rental investments in the greater Kansas City area. We're proud to provide our residents with friendly, comprehensive management services of quality housing.
Get in touch today to find out how we can help your rental needs!