To hire or not to hire?
Now you know what property managers do and it’s time to see if you need one!
You’re in luck. This post highlights a few points that you can use to come to an informed decision.
So, before you rule out the possibility of hiring a management company, ask yourself these seven questions:
1. Do I have sufficient experience and knowledge to manage my property?
At the end of the day, your success in managing your rentals depends on your knowledge and experience in the field.
That doesn’t mean that new investors are doomed to fail.
It just means that there’s a high likelihood that they may make a lot of mistakes at first. And seeing that owning property is a huge investment, it’s never wise to experiment with it carelessly. Because losses can become catastrophic when housing laws get involved.
And that’s where property managers come in. In most cases, they often have the experience, knowledge, skills, and manpower it takes to successfully manage your property.
Also, if you are a new investor, hiring a manager offers you a unique opportunity to learn from a professional.
2. Do I have the time?
Managing a property takes time.
Sometimes there are so many things to be done. And, if there’s an emergency, the property owner is expected to respond promptly.
So, can you handle that kind of demand? Is your work schedule flexible enough to accommodate property management duties?
Generally, landlords who have full-time jobs, or investors who own multiple rental properties may not have this time to spare. This can lead to the neglect of the property’s needs, unhappy tenants, and possibly, a high turn-over rate.
If you feel that you won’t have enough time to tend to your rentals and tenants, it’s best you hire a manager.
3. Do I know how and where to find good tenants?
The only way to run a rental property with minimal stress is if you have good tenants. Why?
Good tenants will not only help you to keep your property in perfect condition but they will also:
- Pay their rent on time
- Report damages that need repairs early before they get worse
- Are long-term tenants
- Aren’t a nuisance to other tenants
- Are pleasant and are easy to get along with
Now, finding a good tenant is a long process.
It involves advertising, thorough screening, filtering, creating lease agreements, and so on.
This process can be costly, tiresome, and time-consuming. And if you are not familiar with it, the chances of making the wrong choices are high.
To avoid this, it would be wise to hire a professional property manager. They know what to do and how to do it in order to get the best renters in quickly.
This is only one of the many advantages of hiring a property manager.
4. Are you willing to trust someone else to grow your investment?
Hiring a property management company means entrusting them with the task of maintaining and growing your investment.
But what if they don’t share the same interests or passion that you have for your investment?
Note that hiring a property manager is not always a guarantee that everything will run smoothly. Sometimes, if you hire an inexperienced company, you may end up with losses instead of profits.
Are you willing to take that chance? If so, make sure you hire the best and most reputable company you can find.
5. How fast can you respond to an emergency?
Ask yourself what would happen if you are urgently needed at your rental property, yet you live miles away?
For example, if there is a plumbing issue that floods one of your tenant’s unit at three in the morning, will you be able to tend to it immediately? How will you deal with that situation if you live three cities away?
In most cases, landlords may have difficulty responding to such emergencies.
But if they have a local property manager looking after their investment, getting such issues resolved becomes easy and more convenient for themselves and their tenants.
Also, if you live far from your rentals, your travel expenses may be high.
Sometimes, those costs can be higher than if you were to hire a property manager.
6. Can you deal with tenants?
Some people often argue that having tenants is like having toddlers.
The same way that toddlers often crave a parent’s undivided attention, tenants want their landlords to tend to their issues immediately.
This especially true if you are dealing with a large number of rentals.
Now, that doesn’t mean that a tenant A will be calling you all the time with a complaint to report. It just means that today you may be handling tenant A’s plumbing issue.
Tomorrow, tenant B may need you to fix their HVAC systems.
The next day, tenant C may have a need or complaint of their own.
Sometimes it’s often an endless cycle of maintenance and problem-solving. And we can all agree that it can be overwhelming.
Luckily, property managers offer to take away such burdens from you.
7. How much will it cost you?
The last and most important question you need to ask yourself is if you can afford to hire a property manager.
Different property managers charge different fees. The size of your property and the services that you need will also affect how much their services will cost.
On average, property management companies charge between 4% and 10% of the net rental income.
That means that if your property yields $2,000 in rent every month, up to $200 (at a 10% fee) of this amount will go to the property manager, or $100 if they charge a 5% fee.
Also, you should note that some managers charge a tenant placement fee.
This means that with every vacancy they fill, you may be expected to pay them a fixed amount or even a month’s rent. This depends on the kind of arrangement you have.
So, have you gotten an answer to the question: Do you need a property manager?
You probably already have. But don’t stop there. The only way to be 100% sure is by leaving no stones unturned.
Ask around, talk to landlords who’ve had experience dealing with property managers, or read online reviews.
Do this until you feel you have enough information to make an informed decision about which property manager to hire.
Do you want to work with us? Contact Doug Anderson Property Management today!