WHY DOES ANYONE NEED PROPERTY MANAGEMENT IN THE FIRST PLACE?
Those property owners who take advantage of professional property management overwhelmingly applaud and support this model for real estate investment. Property owners who hire a high-quality property manager passively build significant equity without the hassle, worry, and labor that would otherwise be needed. But much like a political party that can’t just rely on simply keeping their current followers happy and instead has to attract new voters, the major obstacle for property managers is reaching those people who could benefit most from their services but just don’t know it. Sadly, real estate basics and the opportunities for higher level studies and specialization are not a part of our education system. With that in mind, Nexus Property Management® strives to educate as best we can through our platform as one of the fastest growing property management companies in the region.
LEARN MORE: LISTEN TO WORCESTER GENERAL MANAGER, JESSE MAYO, DISCUSS HOW NEXUS SUPPORTS ALL TYPES OF PROPERTY OWNERS AND INVESTORS
5 TYPES OF PROPERTY OWNER WHO WILL BENEFIT FROM PROFESSIONAL PROPERTY MANAGEMENT
Let’s look at who can benefit most from hiring a property manager. The following five subgroups are what we see the most across all of our offices. That being said, this is not a top down ranking as we see higher levels of different subgroups in different locations. If you are someone in one of these subgroups, we highly recommend you put some thought toward how a property management company could help maximize your profits and help you meet your goals more efficiently and with less stress.
1. OUT OF STATE/ OUT OF TOWN OWNERS
Property owners who do not reside in close proximity to their rental properties are natural candidates for professional property management.
Out of state owners is a significant subgroup in Rhode Island simply because of the state’s size. In Connecticut, out of state investors, mostly from New York, are quite common as well. But by far, out of state real estate investment is most prevalent throughout the rapidly growing Sunbelt region. There’s no place in the country growing as quickly as Phoenix’ East Valley and our Nexus office there works with clients from Utah, California, and Nevada regularly. For any investor taking advantage of booming markets beyond state lines, hiring a reputable property manager is a no-brainer. Similarly, if you’re an investor who has felt saddled by the lack of investment opportunities within your own reach, expanding beyond your borders is possible with a property manager. Nexus’ Nvest® buyers’ agency program is the perfect tool for any investor looking to expand their portfolio by taking advantage of markets that otherwise would be inaccessible.
LEARN MORE: BUYING A RENTAL PROPERTY DOESN’T MEAN YOU’LL AUTOMATICALLY MAKE MONEY
2. OWNERS WITH MULTIPLE PROPERTIES
According to Pawtucket’s General Manager , Greg Rice, “their most common client typically has 1 or 2 multi-family homes”. This trend is similar in the Worcester, Massachusetts territory as well. Depending on the owner’s profession, family situation, ability, and general flexibility, it’s common that landlords can manage their own 3-family apartment with some degree of success. It’s when they expand into 2 or beyond that inefficiencies become problematic. For that reason, many investors limit themselves by assuming that’s all they can handle. The proactive thinking that led you to take advantage of real estate investment is stymied, but it shouldn’t be.
Hiring a property manager, even if it’s just to cover those future additional properties, while you opt to continue to manage one or two yourself, is an extension of the goals that brought you to the rental market to begin with. Again, Nexus’ Nvest® program is the perfect tool to help you expand your real estate holding and access unrivaled property management.
LEARN MORE: PBN INTERVIEW: 5 QUESTIONS WITH NEXUS’ GREG RICE
LEARN MORE: WORCESTER FRANCHISE CONTINUES TO EXCEL
3. OWNERS RENTING DUE TO THE CHANGING MARKET
This subgroup has grown exponentially since Covid and the Fed’s steady increase of interest rates. More and more property owners who would normally look to sell are up against an unfavorable market and instead are turning toward prime opportunities to rent. Nowhere is this trend more common than in Boston’s suburbs, serviced by Nexus’ Natick office. The same tendency has increased throughout New England. This has led to more and more single-family home owners seeking property management than we’ve seen in the past.
While maintenance needs will be far less than is typical in a multi-family home, owners of single-family homes put an even higher premium on the professional tenant screening services a property manager can offer.
LEARN MORE: YOU CAN’T AFFORD NOT TO DO TENANT BACKGROUND CHECKS
Single-family rentals are also much more common out west, as evidenced by Nexus’ Tempe, Arizona office. The requests for tenant placement have always been high due to out-of-state investment and high demand as people from around the U.S. relocate into these spaces. Recent investments in semiconductor chips and other cutting edge technologies are bringing more and more high quality workers to the Valley… and they’re all going to need somewhere to live, most likely via the rental market.
Many of these owners sign up for full management while others opt to take advantage of Nexus’ Rent4U® tenant screening and placement service. Either way, rental opportunities are on the rise and hiring a professional to help tackle something new is always a wise decision.
LEARN MORE: PROFESSIONAL TENANT PLACEMENT WITH NO STRINGS ATTACHED
4. OWNERS WHO DIDN’T EXPECT TO BE OWNERS
Some property owners back into ownership due to circumstances beyond their control. We’ve met and worked with many adult children who inherited properties from deceased parents or relatives. We’ve had elderly widows come in with a property their spouses had managed before passing. We’ve even had college-aged “kids”come in with properties their parents had invested in for them since they were young. These people are not inherently interested in real estate investment, but they’re sitting with an attractive chip in hand and they need advice. Although this subgroup is smaller than most, these people are most in need of professional assistance, but often the most reluctant.
Inexperienced investors struggle to see the big picture and rather than looking at property management as an investment (for merely 8% of collected rent), they falsely see it as an expense. More experienced investors know that making money includes spending money but spending it wisely. If you know someone who is a reluctant owner, let them know there are professionals who can help them better understand their options and help them maximize the gift that’s been left to them.
LEARN MORE: WHAT DO YOU DO IF YOU INHERIT A PROPERTY?
5. ANYONE LOOKING TO BUY THEIR FIRST HOME
As mentioned above, it’s a shame real estate basics are not taught to kids in high school. Instead, young people (although first time buyers are getting older and older), are sold a false story around a white picket fence and a single-family home to call their own, as if they lived on the set of a sitcom. This is wrong on so many levels, none more impactful than the missed opportunity of using an FHA loan for the opportunity to buy at just 3.5% down! Rather than cashing that incredible opportunity in on your dream home, or even a starter home, the informed first time buyer purchases and resides in a three or four unit investment property where collected rents will pay off their mortgage and in some cases they can live there mortgage free! This is the path! The government has created incentives that support this avenue, but too few people take advantage. A professional property manager would offer this advice and guide a first time buyer in a way that will help them quickly accrue the necessary equity to either buy another investment or, when the time is right, buy that dream home they were sold by TGIF or Nick at Night.
LEARN MORE: HOW TO BUY YOUR FIRST INVESTMENT PROPERTY
LEARN MORE: HOW TO ACHIEVE FINANCIAL INDEPENDENCE
NEXT STEPS
It’s Nexus Property Management’s goal and responsibility to help educate property owners and prospective property owners for the sake of improving investment opportunities for all. Real estate investment is an avenue for investors of all ages and backgrounds and it’s our hope that the recent uptick in hiring professional property managers will continue. We see real estate investment as a win-win-win opportunity. Whether you become a Nexus client or not, we want you to succeed as an investor because it’s good for you, it’s good for your tenants, and it’s good for the growth of the real estate investment environment.
LEARN MORE: HOW NEXUS IS REBRANDING THE PROPERTY MANAGEMENT INDUSTRY
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Mick Lefort is the Vice President of Operations for Nexus Property Management®. A National Property Management Franchise that manages all types of rental property from single family homes or condos to large apartment buildings and complexes.
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