Are you a property manager because you want to be or have you fallen into the role simply because you’ve made a multifamily property investment? If you find yourself part of the latter group and are contemplating a change, or you are considering an investment and want to know all your options, this article is designed to provide some insight into a major benefit of hiring the right PM company: cost savings.

While employing the services of a PM company is an added and regular expense, it’s actually also proven time and again to be an investment with a notable return on investment (ROI). It often saves investors considerable amounts of money, in addition to helping secure ongoing income.

A few of the ways property management companies are able to achieve this include:

Reduced vacancy rates - Recent studies show that professional property managers, on average, are able to maintain lower vacancy rates than the national average. In fact, the vacancy rate with a professional is 5.5% while the U.S. Census Bureau average is closer to 9%.

The contributing factors are many, but not surprising. Professionals are often able to leverage more powerful and plentiful marketing and advertising resources, getting the word out there more quickly. They are also have fairly rapid turnover practices that enable them to move-in new tenants rather quickly after a move-out.

Economies of scale - Marketing is just one area or resource professional property managers are able to leverage using economies of scale, or the cost advantages larger enterprises can obtain by making bulk purchases, long-term purchase agreements, and the like. Examples include lawn maintenance for multiple properties, advertising contracts, cleaning services, etc. Thus, the savings is passed along to the owner.

Time is Money - Then there is what many property owners consider to be the most considerable factor – their time. There is a lot that goes into managing a property. It’s a full-time job and then some, with a considerable learning curve that takes even more time to overcome. For many, simply factoring this time issue against the alternative - paying a fee for someone else to assume the day-to-day responsibilities while still benefitting from the cash flow - is a no-brainer.

In order for this approach to work, however, you must find the right property management company. Due diligence is key and that means researching, reading reviews, seeking input from others under the same management, and the like.

In a recent ad campaign, Real Estate Dynamics accurately defined the role of the ‘right’ property manager: “Every day, I help increase the value of someone’s hard earned investment.” These are the PMs you are looking for, and this definition should be easy to identify in the ‘right’ portfolio.