Whether you operate a single-family rental or multiple properties, keeping everything organized and running smoothly can be a hassle. Luckily, many different property management services are available that can help take some of the stress out of managing your assets.
With so many options and an increasing number of homeowners renting out their properties via websites like Airbnb and HomeAway, it’s essential to understand the pros and cons of each type to find the best fit for your needs. Here is a quick breakdown of the most popular types of property management services.
Rental Management Systems (RMS)
Rent out your properties through a rental management system (RMS). With an RMS, you take the rental online and out of your office. This frees up time for you to handle other tasks, like marketing and handling repairs.
The rental market may be changing, but most owners still prefer this option. The most significant benefit of an RMS is that it allows you to increase your income. You no longer have to look for renters, collect rent, schedule inspections and manage repairs. This frees you up for other tasks that make your life easier, so you can spend less time worrying about day-to-day operations.
Property Management Companies
Property management companies are responsible for managing the rental of a group of properties. Some property management companies offer a comprehensive service, while others specialize in certain types of properties.
For example, a property management company may handle all your residential properties, while another company may focus on commercial properties. Depending on your situation, you may prefer a company specializing in a specific property type. A property management company may manage just one property for you or many properties depending on your needs.
Property management companies can charge various fees, including an annual management fee, an account fee, and a supervisory fee. In addition to their management fees, some companies charge an additional monthly payment that covers the costs of maintaining the system.
Co-Management
Co-management refers to a property manager handling another party’s rental. This can work well for an investor who has multiple properties to manage. By hiring a property management company to handle the co-management, the investor only has to focus on the properties he owns.
Co-management can also be a good option for homeowners who own multiple rental properties but don’t want to hire a full-time property manager. Co-managers can be an excellent solution for investors looking to monetize their assets.
For example, a property manager may oversee the co-managed properties’ interior maintenance. This may include fixing broken furniture, cleaning carpets, and washing windows. Co-management is also helpful for asset owners who own multiple properties and are willing to share the work with another party.
A couple with three rental properties may prefer to have one partner manage two properties while the other contains the third. The partners can hire a property manager to manage the third property while they take care of the other two.
Resident Management Organizations (RMO)
A resident management organization (RMO) is a type of property management company specializing in managing rental properties for short-term investors. This may include properties rented via Airbnb, vacation rental sites, and room-sharing websites.
RMOs handle several properties and clients, including vacation rentals, corporate housing, extended-stay hotel rentals, and property management. While working with an RMO might seem similar to working with a property management company, there are some key differences. Unlike a regular property management company, which generally focuses on collecting rent and managing repairs, an RMO focuses on booking and collecting revenue. In some cases, an RMO takes over the property management duties as well.
Other Types of Property Management
Several other types of property management include management by contract and project-based management.
Management by contract refers to an arrangement in which the owner hires a third party to manage the property. The owner pays the third party based on the rental revenue, while the owner bears the responsibility of handling other tasks related to the property.
Project-based management is another type of property management. Under this model, a project manager or owner oversees the entire lifecycle of a construction project, from planning to completion.
This approach to managing assets can fit well for owners with big projects, such as developments requiring a lot of infrastructure work.
Wrapping Up
The bottom line, while there are many different types of property management, each has its advantages and disadvantages. For example, an RMO may allow you to rent your properties via short-term rentals like Airbnb. However, you will have to handle all the paperwork and taxes associated with those rentals.
In addition to the type of management that works best for your situation, it’s essential to understand the pros and cons of each type to find the best fit for your needs. If you’d like to learn more about property management types and options, contact us!
Click here for our Comprehensive Guide to Property Management.
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