In any major city like Toronto, there tends to be more available options for most services. This is true for property management as well. We have seen a steady increase in property management firms in our 25 years in business. And when competition increases, one attribute will always be flaunted by at least one firm: “Affordability”.
Using digital marketing analysis tools, we have identified our clients as “value shoppers”. Not to be confused with “discount shoppers” or “bargain shoppers” who look for the lowest possible price, “value shoppers” look for the best value for their money. For this reason, I would like to explore the value of property management a little further.
Full-service property management is our approach to facilitating landlords through the entire property investment lifecycle. Management is one key aspect of that lifecycle. Our property management team offers a range of services provided by multiple departments to effectively keep your investment property cared for and earning you money all while you can remain completely hands-off. That’s value.
The Risks of Cheap Property Management
While shopping for property management service providers it can be tempting to explore the “affordable” or “bargain” options. I’m here to gently remind you of the hidden costs of cheap property management.
Cheap property managers might be inexperienced
When entering a market, new businesses and entrepreneurs tend to offer their services at a lower rate to gain market penetration early. By undercutting the competition, they can acquire some clients quickly to start building their business and gaining experience.
Mastering the delicate skills of property management takes time, experience, and a lot of learning from our mistakes. As a client onboarded by a new but affordable property management company, you might not get the benefit of the experience of those mistakes, rather; you might experience the mistakes. The hard lessons that property management company will learn might very well involve your property.
Affordable property managers might not be thorough
Your property is one of your most valuable assets. It takes work to keep it earning rental income. It needs to be inspected, maintained, and repaired while your tenants are cared for. This isn’t a full-time job. This is a 24 hours-a-day-365-days-a-year job. The question is, if a property management company is slashing the price, where are they slashing the services?
Discount property managers might be unestablished
The barriers to entrance in the property management industry are few. There are no required licenses or permits and no governing body beside the Landlord & Tenant Board. Essentially, this means anyone can print a business card and publish a website and call themselves a property manager. In this digital age it is increasingly easy to present an established and polished web presence. But it can be misleading to investors like you if the business is not fully established, and the business model is not yet polished.
So, while shopping for real estate investing services, please consider the hidden costs of cheap property management and if you have any questions, contact us.