Can you effectively manage your properties on your own? Some people do so quite effectively, but many landlords are better off hiring a professional property manager. Whatever path you chose, it pays to be informed so that you make a wise decision.
Here are some reasons why you should consider hiring a property management company to help manage your investment:
You Do not want to stress out
This is a tough one. We all like to think of ourselves as level-headed and even keeled, but at the end of the day it takes a special kind of person to deal with the ups and downs of property management. Behind the seemingly simple task of collecting rent every month lie several unpredictable problems can push people to their limits.
Ask yourself how you would react in the unfortunate event that tenants:
- Get in fights with other tenants or neighbors
- Domestic disputes
- Conduct illegal business in the dwelling
- Carry on all night parties and revelry
- Try to sneak extra people or animals into the home
- Decide to sue you
- Trash the property
- Incite the wrath of the HOA because of repeated deed restriction violations
- Refuse to pay rent because they are a “professional tenant” and know how to work the legal system for the maximum amount of free housing at the owners expense?
Many times, landlords like to do what they feel is right, but not what is legal in situations like the above, and that can cost them a lot of money $$$
You live far from your properties.
Do you live more than an hour from your properties? If so, it may be in your best interest to speak with a local property manager. You will need to have contacts within the area of your rental property for any maintenance issues or emergencies that arise with the property or tenant.
You are not familiar with the business.
There are a lot to know about owning a rental property. It is more than just collecting rent. You will also need to know about accounting, fair housing laws, as well as different maintenance vendors to name a few. Not sure who to reach out due to a sewer pipe burst?
Hiring a property manager ensures that the top professionals will handle your investment with care and knowledge.
Your time is limited.
They always say if you are working in your business then you can’t be working on your business. Being a real estate investor means that you are always searching for new properties, arranging financing for renovations or purchases, or changing your business structure.
Having a property manager by your side will help you make good purchase decisions as they will know the market and allow you as the investor to have more time to do the things that you enjoy.
You can afford the cost.
Many real estate investors look at self-managing their portfolio as a cost saving benefit and see property management fees as an additional cost. And they are (partially) correct.
Property managers typically get paid a percentage of the rent collected and there could be other fees associated (such as lease renewal fees) and that will affect the bottom line. But that is short-term thinking and self-managing may not be the most effective use of your time. Time = money.
Is that repair making you miss your kid’s soccer game? Is handling a tenant dispute having you late for your family dinner? Having a property manager allows you to use your time more effectively and doing the things you want to do most.
You are suddenly inundated with management tasks.
Maybe having a duplex doesn’t seem like it would take too much of your time. What about 30 units? Each unit you add to your portfolio is going to add to your workload and what you got into to get more free time ends up taking up all of your time. A property manager will handle all these tasks on your behalf.
You do not want to be an employer.
If you hire a super or other employees to help with your property, you become an employer. And employees can lead to headaches and paperwork. When you hire someone such as a super, it can create gray areas in your business model. Your local property manager is an acting Independent Contractor who is meant to assist to the accounting and upkeep of your investment property.
Your property is part of an affordable housing program.
Many real estate investors like to participate in their local affordable housing program. And it seems like a great idea – market value for your property and a guarantee by Uncle Sam on part if not all the rent. But affordable housing can also bring extra headaches, such as inspections, paperwork, case managers, tenant personal issues. Your property manager most likely already has a working relationship with many programs and knows the in’s and out’s and can guide you through that process.
You are struggling to fill your vacant units.
If you are having trouble filling your units, and you find that they are often vacant despite your efforts, then you will likely benefit from the marketing techniques of a professional property manager. They already have a proven process in house for marketing and advertising vacant units. They also have an insightful eye on what renter’s are looking for and can assist with the coordination in making sure your property is rent ready.
If you are still wondering if you should hire a property manager, remember that the most important factor to consider here is knowledge. A good manager will be able to get you a positive return on your investment (your rental property) because they are the experts in the industry 21— the choice is yours!
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.