Top 5 Reasons to Hire a Property Management Company (Especially in Chicago)
So you've gone ahead and expanded your investment portfolio with some investment properties throughout Chicago-a three flat in Wrigleyville, a small condo in the suburbs, and a get-away place in Southern Wisconsin.
Congratulations! So, now what do you do (besides panic)?
Even though you've gone ahead and made some sound financial moves, it doesn't necessarily mean that it's smooth sailing from here. Sometimes owning additional properties can seem like a full-time job-keeping up with city ordinances, tenant management, knowing local/state/federal laws, ongoing maintenance...the list seems endless.
That's where a professional property management company can help out. Now, before we get started, keep in mind rules that may apply in Chicago and Illinois may differ in other cities and states. That said, here are the top 5 reasons people hire a property manager:
- Collections - you most likely purchased any of these properties in order for them to produce income. If this is the case, rent collection will sometimes be part of the job (if it's a multi-unit dwelling, then it may be an ongoing collection where tenants drop their checks off each month). Also, if rent payments become an issue, the property management company can help in this area as well, or even better yet...
- Tenant Screening - why hassle with rental applications, running background checks, gathering the security deposit, and other steps in the process? The management company will do their due diligence to get a quality renter in your property.
- Maintenance - if you enjoy fixing things or being a part-time handyman, then you're in luck. If not, then you should either brush up on these skills or consider hiring a 3rd party to handle this. They will be able to act as a middle man, fielding the late night phone calls, tenant issues, and even dealing with the maintenance person (in cases where/if this would apply).
- Strategy - this mainly applies to pricing, but could also apply to general property strategy, such as location or purchasing other properties. For pricing strategy, this just means that the management company knows the lay of the land of what things are going for in different areas. Meaning, a high-rise condo in Streeterville will be priced differently than a garden unit in Logan Square. This will keep you from overpaying, but also from breaking a deal by coming in too low.
- The Law - like the famous song lyrics go, "I fought the law and the law won". More often than not, this is the case. So why risk it? Yes, with Google, you have a plethora of knowledge at your fingertips, but you can't be certain as to the accuracy of the information out there. Professional property managers are required to be up-to-date and know the latest laws. Let them guide you with their knowledge and leave chance to someone else.
There you have it...the bucket list of items when deciding to hire a property management company, especially in a bigger city like Chicago. Of course, other reasons may exist based on your personal situation, but this should provide a quick overview in order to guide your decision.