Ask your self these simple questions and make your own decision, is hiring a property manager right for you? While every investors situation is different, there are certain scenarios and factors that owners will face one way or the other.
1. How far do you live from your rental property?
If you are close to the property you may be able to make regular visits for maintenance, inspections, collections, etc., otherwise the further you live the higher your travel time and frustration level may grow. When the distance is a little further than ideal, regular visits become further and further apart opening yourself up to possible problems. You should plan making scheduled visits and remember there is always the potential for a middle of the night emergency call that requires immediate attention. In the long run, will this be feasible for you? A property manager can help.
We all like to think of ourselves as level-headed and even-keeled, but at the end of the day it takes a special kind of person to deal with the day in and day out stresses of managing property. How you would react in the unfortunate event that tenants:
- Get in fights with other tenants or neighbors
- Have domestic disputes
- Conduct illegal business in the dwelling
- Carry on all night parties
- Try to sneak extra people or animals into the home
- Initiate a law suit against you
- damage the property
- Refuse to pay rent because they know how to work the legal system for the maximum amount of free housing at the owners expense?
3. Are you currently overwhelmed with your property(s)?
Managing rental properties can become quickly overwhelming, most “do it yourself” landlords work a regular job. When managing even 1 property, there are always things that require attention and it doesn’t take long for things to get out of hand. Hiring a property manager can provide an opportunity to regain control of you life and your investment.
4. How many rental properties or units do you have or want?
As your portfolio grows so do the management challenges. Investors with larger portfolios stand to dramatically benefit from a professional property manager. Size can also constrain investors’ ability to consider purchasing new properties if they’re already maxed out managing their current holdings. Also, most property managers have access to investment properties not available to the open market.
5. How much experience do you have with maintenance and repairs?
If you can’t do it yourself, do you know who to call? Do you know what things usually cost? Finding contractors can take a while and in the mean time you may unknowingly hire people that are unethical, uninsured, do poor quality work, and may over charge you. Maintenance and repairs are a significant component of property management, and if you question your ability to ensure the work is done well and in a timely manner, you might want to consider hiring a property management company.
Marketing and advertising, answering calls and showing the unit can take a considerable amount of time. Obtaining credit and criminal background checks, rental history and income verification are crucial to find the right tenant. If these processes are not done vigilantly vacancies will quickly eat into your profit margins. If you question whether you have the skills or the time to perform these tasks, OR if you have historically had a high vacancy rate, you should probably consider hiring a property management company.
7. Are you capable of handling the accounting and record keeping for your property?
From profit and loss statements to tax deductions, this area needs special attention and becomes an increasingly larger burden for larger portfolios. Some owners may opt to hire an accountant to help with the book keeping, this is another expense you will have to incur. If you feel like this might be a weak point you might want to consider hiring a property management company. Most of the top rated companies provide property accounting.
8. Are you willing to be on call 24/7/365?
Think about this honestly, because when an emergency happens at your property you can’t ignore it. Your special event, important meeting, vacation, personal crisis or just a weekend off, doesn’t relieve you of your obligation to your tenant. These emergencies don’t happen all the time, but when they do you have to be willing and able to handle them immediately. Can you handle being called at 2 am to fix someone’s overflowing toilet?
9. Are you willing to confront tenants about late payments and if need be evict them from the property?
Many new owners dislike feeling like the bad guy and try to be understanding by making exceptions. The problem is that this only invites additional abuses and excuses by tenants. Late payments must be dealt with immediately, and while sometimes a friendly reminder is all that’s needed, other times, it can be a very confrontational process. Running a successful rental business means enforcing the rules in every situation, it might mean evicting a single mother who lost her job and won’t be able to pay rent anytime soon.
10. How well do you understand the local landlord – tenant laws?
Ensuring the property is run in accordance with the law is critical in both preventing lawsuits and shielding yourself from liability if you are sued. Familiarity with contracts and leases is also very important as your rental agreement is the only binding agreement between you and the tenant.
Ultimately, your decision to hire or not hire a management company should hinge on whether or not it is a good fit with your lifestyle and makes sense financially. The first step, find a local property manager and give them a call and set up a property review.