Can You Manage? Is it Time to Hire a Property Manager for Your Investment Properties?
For many investment property owners, regulating their properties and tenants is not their only profession. But, when you take on the title of “landlord,” there is, unquestionably, a lot of responsibility that goes along with it. Of course, it is possible to manage an investment property on your own or with the help of another family member or friend. However, if you own more than one property or are finding that your primary profession does not allow you adequate time to be the kind of landlord that you had envisioned yourself as, you may be considering hiring a property manager to assist with your property and tenant concerns and needs. If you’re struggling to decide whether or not you should hire a property manager for your investment property, here are some things you may want to consider: Expense It is not uncommon for property managers to charge a fee of up to 10% of your expected rent. So, do the math. Depending on how much you charge for rent, decide if the cost of retaining a property manager is worth it. Also, on the financial side, it is typical for a property manager to function as an independent contractor; but, if your chosen property manager does not, you will also be looking at adding an employee, which will entail other financial and legal responsibilities. Location Do you live across the street or across the country from your rental property? Your proximity to your investment property can play a huge role in how well you are able to manage it. If you are able to stop by your rental property on your way to or from work or during lunch, you may have enough accessibility to manage it yourself. If you live in Pennsylvania, but own property in Virginia, the chances may be good that you may need some extra help at times. Time Time may seem like an obvious consideration when it comes to any task, but it may be hard to judge just how much time managing your investment property could take. When it comes to filling a vacant property, consider the time it takes to advertise, field questions, interview potential tenants, complete paperwork and credit checks, plus check references, not to mention being there to deliver the keys when your chosen tenants are ready to move in. Once your investment property is rented out, factor in the time it will take to deal with occasional issues like minor repairs or noisy neighbors. While it certainly is a dismal thought, you should also consider the possibility for any major issues like fire, flood or a tenant who refuses to pay. All of those circumstances take time to correct. If you own more than one property, multiply those issues by the number of properties you own. Experience Is “landlord” a new title for you? If so, do you feel comfortable with having all of the responsibilities that go along with that title? In addition to everything that goes in to finding tenants and maintaining a property, in the early stages, you will also need to draft a lease agreement that you are comfortable with and get to know landlord-tenant laws. For first-time landlords, a property manager can be extremely valuable, for those reasons alone. If you are not a first-time landlord, but recently have acquired additional investment properties, do you consider yourself experienced enough to juggle the multiple responsibilities that go along with each rental? An experienced property manager, whose primary profession is maintaining your properties, may be the answer for you. Trust Finally, can you trust another person or a company with your “property baby?” If you are usually hands-on with most things you undertake, this is a very serious consideration. Property managers are there to deal directly with you and with your prospects and tenants. They often are able to handle the marketing, collection, maintenance, complaints and possible evictions. But, can you handle someone else doing “your” work? Some experts argue that if you are your own property manager, then you will be more likely to control your tenants and keep better watch over your property. Similarly, some believe that a property owner is more inclined to maintain their property and keep long-term tenants. In reality, there are many fully-capable and trustworthy property managers who tend to properties as if they are their own. Of course, selecting a great property manager can be just as time-consuming as selecting a great tenant! Good luck!
