If you are a landlord who owns a rental unit, one of the biggest decisions you’ll make as a landlord is whether you should hire a property management company. Many of the landlords manage the property on their own but there are some risks when it comes to managing a rental property. So, the question arises here, Should i hire a property manager. The landlords may need some help, where he might consider hiring the property management companies to manage the rental property which makes sense.
Property management companies can be a huge asset for your business i.e. rental property but they don’t come cheap.
There are a couple of reasons where you should think about recruiting a property management company and approximately a couple of reasons where you probably won’t consider employing a property management company for managing the rental unit. Carefully review the following factors to determine whether you need a property manager or not:
When Should You Hire a Property Manager?
It could be the best choice in some situations to manage a rental property on your own. However, here are some of the conditions where you need to hire a property manager to manage the rental properties:
1. You Don’t Live Within Close Proximity to Every Rental Property You Own
Time is one of the important factors. As a landlord, You must consider how far the rental property that you own from your living place. If you live a long way far from your rental property, you can find it difficult to manage it in various circumstances, such as when urgent repairs are needed.
2. You Have a Limited Period of Time
Keeping track of a rental property is a time-consuming business. Finding tenants, tenant screening, routine inspections, dealing with repairs and maintenance, and other aspects of property management can take a significant amount of time, particularly if you own several rental properties. If you have a full-time job and you are not capable of giving attention to the rental property, then the success of your investment would depend on hiring a good property manager. Self Managing is not referred to you are not capable of dedicating a dedicated time for rental property management.
3. You Are Not Capable of Dealing With the Tenants
Screening Tenants is one of the difficult tasks. You may fail in screening the tenants in the right way. Screening the tenants can be a difficult task if you do it the right way i.e check credits and call the references. Plus, there’s a fair chance you’ll have to deal with an unfair tenant, late rent, or eviction even if you screen your tenants well. It’s great if you think you are capable of dealing with all of the stuff related to the tenants. If not, it might be worth every penny to hire a property manager to manage the rental unit.
4. You Are Capable of Affording the Cost
Just like any other service-based business, the fees charged by property managers vary tremendously.
Most of the Property managers charge 8% to 12% of the monthly rental income from the property owners for finding the tenant and managing the rental property. Some of the property managers also take a bigger cut of the tenant’s first-month rent to help offset the time and expense of putting a tenant in place, while others don’t. For example, A property manager may charge half of the first month’s rents plus 8-12% of the rent on an ongoing basis. If you own several rental properties and hiring a property manager to manage those rental properties then you might be able to get a better deal.
5. If You Are Ok Giving up Control
Hiring a property manager means you will be giving all of the crucial controls over the property to the property manager. You may not have full control over the rental properties such as collecting rents, filing property taxes, and many more.
Self-managing could be the best option if you know you’d be happier in control of the entire operation. Hiring a property manager can make more sense if you’re willing to relinquish some power in order to save time.
6. You Want Peace of Mind
If you have confidence in the project manager you have hired for managing the rental property, then you might live in peace of mind allowing the landlord to perform all of the management works related to the rental property management. All of the problems related to the tenant or the property or the tenants will go through your property manager before coming to you.
The property manager can filter all trivial issues related to the tenant and property management and can only bother you with the big issues. On the other hand, if your property manager your hires turns out to be non-communicative then it might be stressful. For some landlords, managing the rental property on their own would give more peace of mind rather than hiring rental property management.
You can check out What does a property manager do to know more about how the property manager can help you to live with peace of mind.
7. Your Level of Experience
Property management and property ownership are two different terms. A property owner might pose ownership over a rental property but might lack the management skills required for managing the rental properties.
If you lack property management skills, your competitor might take all of the benefits due to a lack of managerial skills by hiring a qualified and experienced property manager. They will know how to find tenants, how to handle all the issues related to the tenant, how to find and screen the tenant, collect rents, and abide by the landlord-tenant laws. It would be much easier for you to buy a rental property as a result of this.
If you choose to learn all of these things, it might end up being too costly.
8. You Don’t Know the Laws That Apply to the Landlord
As a landlord, How much do you know about the laws that apply to the landlord? One of the most significant benefits of employing a licensed property manager is the opportunity to escape such legal entanglements. Property managers can prevent violating discrimination laws by having a thorough knowledge of both state and federal laws pertaining to discrimination in tenant screening and selection. An experienced property manager can handle the eviction when necessary in a way that will save time and money while staying within the boundaries of the law.
Any investment property needs the services of a property manager. They help you get the most out of your investment while also educating you on any laws and regulations you must obey.
If you decide to hire a property manager, check out How to choose a property manager.
What is a reasonable property management fee?
The reasonable property management fee generally ranges from 7%-10% of every month’s rent for ongoing management and moderate leasing fees, typically from $500 to a 1/2 month’s lease or more, when an inhabitant is at first positioned.
How do I hire a good property manager?
The landlords may hire a good property manager through referrals from friends and relatives, researching the property managers online, and interviewing several property managers with licenses.
How is the property management fee calculated?
A portion of the gross received rent is normally charged as a maintenance fee, but some rental property managers charge a monthly flat fee. The cost of managing a single-family home varies by industry, but most management firms charge 10% of the monthly rent.