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Can I Make a Profit If I Hire a Property Management Company for My Investment Property?

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Whether you own one property or many, you may find yourself thinking about hiring a property management company out of necessity or simply convenience. If you find yourself considering a property management company for your investment property, it is quite possible to continue making a significant profit, while reducing your workload and taking a more passive approach to your investments.

How Hiring a Property Management Company Affects Profit

In many cases, hiring a property management firm will reduce your overall profit, at least initially, but a good property manager can also help to increase your profits. How much profit you will make after hiring a property management firm will depend on several factors:

  • Management fees: How much the property management company charges for its service will directly affect your profit. Many companies charge a small percentage of the monthly rent per unit, while others charge a flat fee.
  • Rent prices: The amount of rent you charge and your pricing flexibility can also affect your profits. If your rental property is in an area with low rents and low profit margins, and the market offers little room for rent increases, your profits may be low. If you have a decent profit margin or can increase the rent slightly, you can enjoy significant profits even with a property manager.
  • Management style: With a good property manager, you will have fewer rental vacancies, better advertising, and a larger tenant pool. The right property manager can also reduce contractor, vendor, and material costs through industry connections, make improvements to the rental units that warrant higher rent prices, and generally reduce costs, leading to overall higher profits.

If you have only a few rental properties, plenty of free time, some maintenance and accounting skills, and minimal flexibility in your rent prices, it may not make financial sense to hire a property management company. However, if you have a busy schedule, numerous investment properties, and the flexibility to absorb the management fees, hiring a good property manager will likely be the best option, freeing up your time for more important endeavors, and allowing you to enjoy a more passive source of income.

Services That Property Management Companies Provide

When you pay the management fees for a property management company, you receive significant value for the price. Depending on your specific agreements, a property management company can provide numerous services, including:

  • Advertising and filling apartment vacancies
  • Collecting rent and setting rent prices
  • Lease negotiation and management
  • Screening and interviewing potential tenants
  • Responding to tenant inquiries and complaints
  • Performing background checks on tenants and staff
  • Accounting, reporting, and bookkeeping
  • Janitorial and cleaning services
  • Building construction, remodeling, repairs, and maintenance
  • Code compliance and property inspections
  • Hiring staff, vendors, and contractors

A property management company can minimize your involvement in your investment properties, and if you purchase property with the expectation of hiring a property manager, you can adjust your offer accordingly to maximize your potential profit.

Property Management Companies in Maryland

At Tidewater Property Management, our team can help you manage all of your investment properties, while focusing on maximizing your profit potential. We offer services for commercial and residential properties throughout Maryland. Contact us today at (443) 548-0191 to learn more about our property management services!

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Our Mission

Since we opened our doors in 1989, Tidewater has been offering personal customer service throughout Maryland, Virginia, Delaware and West Virginia. Due to our dedication to helping homeowners buy, sell, rent, and maintain their properties, we have become one of the largest family owned full-service real estate management companies in the area.

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Tidewater managed my condo for 2 years. They were professional, promptly addressed service requests, inspected my property to ensure it was being properly cared for by the tenants and gave me ultimate peace of mind,…
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Maisha C. Maisha C.
Tidewater has been managing my property in Odenton, MD, for nearly 5 years. They have been excellent in supporting my needs, and leave me feeling confident that my property is in good hands while deployed.…
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Ben C. Ben C.
My experience was great! I had the pleasure of working with Melody Timmons. She was very responsive to messages and very communicative. She made every effort to accommodate us when scheduling a time and date…
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Nicole S. Nicole S.
Tidewater provided incredible service as they managed my rental property for more than 3 years. The team is responsive, communicative, and professional. Highly recommend Tidewater Property Management!
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Shayna H. Shayna H.
Cody helped us purchase our new home in Baltimore. We were living in Arizona and had a lot of complications to work through logistically and Cody stepped up every time to help us out. He…
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