Understanding ‘Cheap’ Property Management

System - Monday, November 7, 2016

Property management companies are not all created equal. They don’t cost the same, and they don’t deliver the same quality of services — so why do some owners choose to evaluate property management solely on the basis on how much (or how little) they cost? We all understand that fast food restaurants are cheaper because the food isn’t of the same quality as the fine dining venue down the street. So when the success of your investment property is at stake, why choose a “cheap” property management option?

Too often, a cheap property management company comes with too many gaps, when compared to a more reputable and marginally higher-priced firm — gaps related to cost, quality and value. You wouldn’t expect steak and lobster at a fast food restaurant, and you shouldn’t expect first-class management from a property manager that is cheap, discounted, or the lowest price.

So how do you evaluate your options and make sure you’re receiving the best possible services for your dollar?

Here’s a look at how to choose a property management company:

  • Cost Gap: Most landlords pay somewhere between 8 to 10 percent of their rent intake as the management fee, which is enough to hire a quality property management company. A cheap property management company may look to undersell the market by offering service at between 4 and 6 percent of rent. The cheap property manager can make this work, but it comes at the expense of being less responsive, less professional and less attuned to the needs of the tenants and the property owner. If rent for a single unit is $1,000, that’s a difference of about $20-30 a month, which isn’t much to invest if it means securing quality property management rather than inferior services from a cheap property management company.

  • Quality Gap: Your tenants are looking for value, too. They want quality of services and management that aligns with what they’re paying in rent. If the quality of your management drops sharply without them receiving a lower rent, they might not sign again at the end of their term. New tenants won’t pay what you want if your landscaping is falling to pieces, if maintenance isn’t performed regularly and if there are poor reviews of your property and services on rental sites. The result could be a rise in your vacancy rate, which will cost you a lot more than $30 a unit — proof that a quality management company is a better choice than cheap property management.

  • Value Gap: You get what you pay for, which often means a quality manager delivers real-time market knowledge and expertise, a local headquarters, a hands-on approach, responsiveness, 24-hour emergency calling and much more. This is incredibly valuable to you as the property owner — value you don’t receive when you choose a cheap property management company that may be based in another city and unable to provide immediate local assistance. If you want to make the most of your investment, find a property manager who will care for it and treat it as you would.

At Harrisburg Property Management, we deliver the value you need from a property management company. We exist to serve only one community, and our experience in the Harrisburg-Hershey-Carlisle area shines as we work with property owners to make sure they’re benefitting from their investments. We deliver the 24-hour care that only a responsive property management company can provide, and we strive to make a difference — lowering your vacancy rate and keeping your property profitable. You can save a few bucks each month by going with a cheap property manager, but that approach only leads to challenges down the road.

If you’re wondering how to choose a property management company, give us a call. We’re glad to share our approach to property management, and we invite you to compare our services to your other options. We work with a wide range of local properties, and we can connect you with some of the owners who have chosen our valued services. When you’re looking to sit back and enjoy life while your investment delivers dividends each month, put your trust in Harrisburg Property Management.

Contact us today about how our management services can help your property.

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