Renting out your property is a task that can be surprisingly more complicated than you may have first suspected. There are numerous legal requirements for landlords, and you must also take steps to protect yourself from irresponsible tenants. Considering that many people want their rental to be a source of passive income, reducing these demands is likely an important goal for you. While property management companies specialize in helping you handle these responsibilities, there are a couple of myths that prospective clients need to be aware of.
Myth: Only The Property Management Company Should Carry Liability Insurance
While property rentals can be an excellent way of generating income, they can also expose you to liabilities. Sadly, landlords believe that only the entity managing the property needs to be insured against civil liability claims. However, this is far from the truth, and it is important for the owner to maintain a liability protection.
Yet, investing in liability insurance can be somewhat expensive, and there are some property owners that may avoid buying these policies for this reason. However, it should be noted that many property management companies offer a service that will add their clients to their own insurance policy. While you will still be required to pay a monthly premium for this coverage, this can be an excellent way to avoid having to spend the money to buy a separate policy.
Myth: Screening Tenants Is Always A Part Of The Management Process
Unfortunately, many people assume that these services will automatically handle every aspect of the rental process for a single fee. Interestingly, it should be noted that the process of screening potential tenants and managing the day to day tasks of the property
Due to this distinction, you should expect to pay separate fees for tenant screenings and property management services, and while this may seem inconvenient, it stems from the costs of performing these services. Managing the daily tasks of the property will require labor and repair costs. Additionally, tenant screening requires the company to pay for an extensive background check on any potential tenants. Fortunately, there are many property management providers that offer a discount for clients that bundle these two services, and taking advantage of this discount may be an option for dramatically lowering the cost of enjoying the benefits of both of these services.
If you are considering renting out some of your property, it is important for you to be well-informed about the services offered by property management companies. By understanding the truth behind the common notions concerning the need for liability insurance and the types of services these providers offer, you should be in a better position to make a sound choice regarding the use of these services. To find out more, speak with a business like East Valley Property Management.