Real estate investors often manage their rental properties to save the costs of property management fees. But, do-it-yourself property management can be time consuming and stressful.
So, if you’re wondering if a property manager is worth it, here are some helpful insights on the pros and cons of having a property manager and what property managers can do for you.
Pros and Cons When You Hire a Property Manager
Here are the advantages and disadvantages of hiring a property manager.
1) Free your time
Managing your rental property could take up much of your time and energy from placing rental ads, responding to messages, screening tenants, to solving maintenance issues. And these responsibilities multiply as the number of your property investments increase.
So, hiring a property manager helps take these responsibilities off your plate, so you could focus more on other important things, such as looking for additional property investments.
Also, having a property manager allows you to move elsewhere without worrying about maintenance issues that need your quick response.
2) Experience and knowledge in the industry
One of the things that property owners often overlook about property managers is their wealth of knowledge and experience.
A property management company typically has years of experience in managing homes and already has its defined process. Over those years, they’ve learned how to deal with often overwhelming things for landlords, such as dealing with tenant disputes, evictions, lease breaks, and others.
Also, most property managers are real estate agents who have acquired relevant education on the ins and outs of property investing, right pricing, and especially with the landlord-tenant law. They see what is happening in the market and give you great advice on property investment.
3) Save you from stress
Other than saving your time and energy, property managers can also save you from the headaches of getting calls at 2 am or dealing with tenant disputes.
Not only can they save you from worrying 24-7 about your rental properties, but they can also free you from the hassle and stress of dealing with legal requirements. In addition, their strong know-how on the landlord-tenant law helps ensure that you’re complying with all regulations.
4) Help scale your investment property
If you’ve been thinking about investing in multiple properties and scaling your real estate investing, hiring a property manager works to your advantage.
Property managers can help look after your multiple properties, and this may enable you to have economies of scale, where the percentage of the costs of paying management goes down. This can eventually increase your cash flow.
1) Management fees
One of the reasons that can hold back rental property owners from hiring a property manager is the property management fee. It varies in every property management company, but most charge a monthly fee which is a certain percentage of the monthly rent.
Other than the monthly charge, there can also be a leasing fee that goes to the marketing of your rental units and miscellaneous fees. Some others even have cancellation fees, extra maintenance fees, renewal fees, and other fees.
So, before you buy into the low management fees of some property management companies, try to ask if there are other extra fees you might be charged with.
2) Hiring a poor property manager
One possibility when it comes to having another manage your property is hiring a bad property manager. Unfortunately, some property managers are not just as involved as you are as the rental property owner.
However, this is an issue that can be managed. It takes building a good relationship with your property manager and managing them well.
Roles of a property manager
Here are the tasks a property manager can help you with.
Dealing with maintenance issues
Property managers help ensure the property is in good condition and is a safe place for the tenants.
They take care of any vacant unit or any needed renovation and, therefore, do regular inspections. They are also responsible for resolving tenant complaints and enforcing occupancy rules.
Professional property managers also help in setting, collecting, and adjusting rental income.
This means they have to:
- set the right rental rate for attracting tenants and generating income for the owner,
- set up a system, deadlines, and penalties for rent collection, and
- increase or decrease the rent based on the real estate market development.
Finding and screening tenants
Another role of property managers is tenant management, which includes finding and attracting tenants and screening prospective tenants.
When it comes to making sure prospective tenants are trustworthy, they have a process that involves checking the prospective tenant’s credit history and background.
Property managers are also responsible for handling the property’s financial operations, including rent collection and payment of mortgages, taxes, insurance premiums, payroll, maintenance bills, and others.
When should you hire a property manager?
Here are insights to help you decide whether you should hire a property management company:
- You’re a time-poor investor.
- You’re not interested in self-management of properties.
- You have multiple properties.
- You don’t live near your property.
- You can afford the management fees.
While there is nothing wrong with do-it-yourself property management, and it might save you some costs, hiring a property manager can work to your advantage.
If you can afford the property management costs, it can help your life become less stressful and free up your time to explore other ventures.
And if you’re ready to scale your property investing business, feel free to talk to us so we can help organize your finances.
Are you going to get a property manager, or have you already hired one? Please share your thoughts with us!