Hiring a property manager can help you run a professional rental business and save you time, however, they do come with disadvantages.
When asking yourself the question of whether or not you need to hire a property manager, you need to first consider what a property manager does. A property manager is someone who operates, maintains, and oversees a property on behalf of someone else.
The property manager is usually the middleman between the tenant and owner and can make owning rental properties much simpler. Some landlords, however, prefer to self-manage their properties.
In this article, we explore exactly what you need to know when deciding whether or not you want to hire a property manager to reduce your rental property management workload.
The primary purpose of hiring a property manager or management company is to safeguard your real estate investment and ensure a steady stress-free income stream. Property managers fulfil various roles, ranging from helping with compliance questions to operating a full-service that does everything for you.
So, what exactly does a property manager do? Some common responsibilities typically shouldered by property managers include:
Landlord-tenant laws can be complex. Everything from selecting tenants to collection deposits, legal documents to rent collection processes have rules and regulations that need to be adhered to. Not doing so could leave you open to expensive law suits, or worse. And ignorance is no excuse.
By leveraging their expertise in local laws, property managers prevent potential legal complications that might arise due to unwitting violations by property owners.
It doesn’t always make sense to invest locally, higher property prices, lower demand, large property taxes or restritcive laws are all reasons you might look further afield for your investments. However, managing a property in an unfamiliar location especially when you can’t easily get to your property can be challenging.
Property managers handle the day-to-day details, including property maintenance and operational issues, so that remote owners don’t need to regularly travel great distances and tenants can get fast and quality service when they need it.
No one wants to be receiving calls in the middle of the night with a maintenance emergency. By outsourcing property maintenance you can take the stress off your shoulders and ensure your tenants get timely resolution of all maintenance issues.
One of the more labor-intensive parts of running a rental is finding new tenants. You have to create your listing, get photography, manage applicants, run showings, screen tenants, and organize move-in dates. And it has to happen fast.
Allowing a property manager to take this task on can help you minimize vacancies and reduce your stress when leases come to an end.
While utilizing online rent collection tools like Landlord Studio makes it incredibly easy to collect rent, you may still need to deal with late and missed rent payments, late fees, and evictions. All of which are time-consuming tasks that you may not want on your plate.
By enlisting the services of property managers, investors can rest assured that their properties are managed professionally, allowing them to enjoy the benefits of their investments without the hassle of day-to-day management.
There are many benefits to self-managing your property. Firstly, there is no better way to become familiar with an industry and a job than jumping in headfirst. Owning and managing property means you will need to quickly become familiar with the ins and outs of the industry, from laws and regulations to tenant management idiosyncracies.
Secondly, you remove the risk of miscommunications that can happen if you have a property manager playing middleman to your tenant communications. By dealing with tenants directly you’ll get a better sense of what they are like and you’ll be able to offer better service to improve tenant retention.
Finally, self-managing is far more cost-efficient. As a baseline, your typical property manager will likely charge between 8 and 12% of the monthly rent amount (plus expenses).
Managing your own rentals is a rewarding feeling but it can be time-consuming, from managing tenants to organizing the books. Your ability to grow your portfolio is restricted by your capacity as one person.
Because of the benefits of self-managing and the cost of hiring a good property manager, many landlords choose to self-manage, especially when they're just getting started.
By employing tools like Landlord Studio they can create streamlined processes for everything from tenants screening, to rent collection and income and expense tracking. Automating your property management in this way they can massively reduce the time requirements allowing you to spend more time growing your business while giving your complete control over your rentals and ROI.
* First 3 properties free.
It’s no secret that having someone do the job for you has its perks. Outsourcing jobs is vital in order to reclaim the time that would otherwise be spent managing your property portfolio.
In the event of a problem, a property manager brings their repertoire of connections, legal expertise, and vendors to the table and can help you arrive at a stress-free solution, fast.
Additionally, a property owner who has a diverse portfolio that extends across state lines may be more likely to need a property manager who is closer and can be more hands-on with the rental management.
Finally, property managers bring to the table years of experience. Their knowledge of real estate codes and regulations will help ensure th
Hiring a property manager isn't as simple as making a phone call. A bad property manager could easily run your property into the ground. To guarantee you’re getting the right person/ people for the job you'll need to do plenty of research and make sure to meet them in person.
As mentioned above, cost is a major factor. Not only could a property manager charge up to 12% of the gross income of the property but there may also be additional costs on top. Property managers often charge separately for services such as finding new tenants.
Additionally, no one cares more about your investments than you do. By handing the reigns to a property manager, however, you may find yourself left out of the loop regarding important decisions less trustworthy property manager might be more interested in collecting checks than running a quality rental business and looking after the property and the tenants.
Even if you do hand your property management over, running rentals is not a passive endeavor. You should be receiving regular updates on the property finances, outgoing expenses, and the tenant's situation. Becoming complacent could result in costly changes being required down the line or even forcing you to sell up.
Whether or not a property manager is worth it for your rental business depends on a number of factors. How many properties do you own? How much time can you spare for the management of your rentals? Are your properties local? How familiar are you with rental property laws and regulations?
It’s not unheard of for an owner to manage multiple properties on their own – especially with recently developed automated services. Property owners should enquire about a manager if they fit the following criteria:
Self-managing is a great way to save money and keep your finger on the pulse. It allows you to gain a deeper understanding of your investments and increase operational efficiencies and cash flow. However, it does require a greater input of time.
Thankfully, with solutions like Landlord Studio, you can create streamlined processes and save both time and money when self-managing your rental properties.
* First 3 properties free.