Reasons to Hire a Property Manager
Property management is unnecessary if you like to be a part of every aspect of managing, from listening in on tenant calls to picking contractors. If you plan to oversee the entire process, you may as well save yourself some money.
The time commitment is often a major reason property investors seek help. Managers are available at night and on the weekend when residents have free time to put in service requests. If you happen to be free at these times and you’re willing to put in the work, it makes sense to manage on your own.
For some landlords, running a rental property is a hobby. There’s no need to hire help if you enjoy DIY home repair projects and chit-chatting with residents especially if you don’t plan to expand your portfolio in the future.
Finally, having an attorney or housing law background is the last reason to pass on property management. You already have an understanding of the law and know how to draft a binding lease – just make sure you also have time to appear in court to represent yourself.
In some situations, it may not make sense to hire a property manager. If you have experience managing properties and your schedule will permit the flexibility needed to be responsive, you can take the DIY approach. Just make sure you’re willing to handle emergency calls late at night, on weekends or on holidays.
Are Property Management Companies Worth It?
A management company is worth your money, unless you’re knowledgeable about marketing a property, vetting the tenants, making repairs (during and after hours), handling security deposits in escrow accounts, returning a security deposit legally, and filing for eviction.
Also, property managers keep you from undervaluing your house. A good property manager finds out how much the market will pay. Recently, we had a client in Denton who was leasing his property for $600/month. He had priced his property based on the college demographics, but he underestimated the market. After our market research, we upped his rate to $1,300/month. In cases like these, a minimal management fee (typical property management fees can range anywhere from 6-12% of monthly rent) is well worth the monthly increase that follows!
Should You Hire a Property Manager?
It’s the million dollar question! Ultimately, whether or not you decide to hire a property manager is up to you. Even if you have the experience you should weigh both options. Are you interested in saving money or saving time? You may find it’s worth the investment to pass the responsibility on to another person.
A great benefit to hiring a property manager is reducing the risk of management oversight that can jeopardize your cash flow. Remember that security deposit code we discussed earlier? Depending on where you live, if a security deposit isn’t returned within a certain time frame to the right person, you may be held liable for three times the deposit amount. It’s small details like this you may be unaware of or don’t have the time to coordinate that a property manager will take care of.
Still trying to decide if a property management company is right for you?
If you’re still unsure which option is best for you download my 20 Q & A you need to ask before picking your project manager.