As a landlord, deciding whether or not to hire a property manager is likely a dilemma that has crossed your mind at some point. Property managers can improve the efficiency and quality of your operations, but hiring one may seem like an expensive, daunting task. You might be wondering what exactly a property manager does, what qualifications they should have, where you can find one, and how much it will cost. We’ve compiled some answers to these questions to help you make a more informed decision about whether hiring a property management company is right for you.
What Does a Property Manager Do
Oftentimes functioning as the “face” of your operation, property managers will deal directly with your tenants and handle any complaints or concerns they may have. They will also handle rent collection, evictions, and maintenance issues. Some property managers will also set rent and handle taxes. With these responsibilities taken care of, you will be free to focus on growing your operation as a whole. In addition, a good property manager will work to find you new tenants to fill vacant units, providing growth and a return on your investment properties.
Qualities and Qualifications to Look for
Highly qualified property managers should have a working knowledge of landlord-tenant law and in ideal situations should also be a licensed real estate agent or investor themselves. Other requirements vary from state to state. In addition to ensuring that your potential vendor partner is fully licensed, you will want to make sure that they will be a good fit for managing your property. Ask them questions ensuring they will be comfortable handling fiscal responsibilities, dealing with tenant disputes, and other important duties. Clarify that they have experience dealing with evictions as well. Evictions are a significant concern for any property owner, and need to be dealt with professionally, efficiently, and within the confines of the law in the area the property is located.
Where to Find a Property Manager
This is the important part; before you hire a property manager or management company, it’s helpful to understand what questions to ask that will best tell you whether they will take proper care of your rental properties. While there are many property management directories online that can be found with a quick Google Search, you’ll want to do more in depth research on whichever company you find. Talk to other landlords and ask them for recommendations on property managers. This can help you quickly establish that a potential management company is well respected and trusted before you take steps to hire them.
How Much Will It Cost
Property managers will usually charge a monthly fee in relation to the total income of the property. This ranges from about 6-12%, depending on the company. Evaluate your finances carefully to confirm you can afford this without sacrificing too much cash flow. In many cases, this is a relatively small price to pay for freedom from dealing with time-consuming management tasks. Remember that your time is valuable, and every hour spent managing can take away from the profits of your rentals.
Is a Property Manager Right For You
Now that you’re aware of how to hire a property manager and the benefits they can potentially provide, you’re likely wondering if you should start the process of hiring one. As long as you can afford it, you should likely consider hiring a property manager if you:
- Have a small to mid-size portfolio
- Live far away from your properties
- Are not interested in hands-on management
- Have limited time
- Have too many management tasks to handle alone
As long as you are comfortable allowing someone else to help handle your management tasks, hiring a property manager will make your life easier. You won’t need to commute to your property constantly stay in touch with your tenants, and deal with evicting defaulted tenants. While you will have to spend a bit more money on a manager, the time it will free up for you, in addition to the potential growth a good manager will provide, can certainly make it worth your while.
Ultimately, the decision about hiring a property manager is yours, as a landlord, to make. The benefits are simple; added freedom, an opportunity to further grow your rental portfolio, and a potential new partnership with someone in the industry. The costs are strictly monetary and must be weighed based on your situation.
Are you thinking about hiring a property manager? Let us know what your concerns are in the comments!
