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 manager or not. Many landlords manage the property on their own, but there are some risks when it comes to rental management. So, the question arises here: Why hire a property manager, and when should hire one? The landlords may need some help, so they might consider hiring rental property management companies to manage the property, which makes sense.
Property management companies can be a huge asset for your business, i.e., rental units, but they don’t come cheap.
There are a couple of reasons why you should think about hiring a property management company and approximately a couple of reasons why you shouldn’t consider employing a property management company for managing your rental units. Carefully review the following factors to determine whether you should use a property management company or not.
It could be the best choice in some situations to manage a rental unit on your own. In this article, we will discuss the unmeasurable reasons to hire a property manager to manage the property.
When Should You Hire a Property Management Company?
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 property that you own is from your living place. If you live a long way from your rental unit, you can find it difficult to manage it in various circumstances, such as when urgent repairs are needed. In such cases, you have to hire a property manager to focus on your profit maximization from real estate investment.
2. You Have a Limited Period of Time
Keeping track of a rental unit is a time-consuming business. Finding tenants, tenant screening, managing tenants, routine inspections, dealing with repairs and maintenance issues, and other aspects of property management can take a significant amount of time, particularly if you own multiple properties. If you have a full-time job and you are not capable of giving attention to the rental unit, then the success of your investment would depend on hiring a good property manager. Self-managing is not referred to as you are not capable of dedicating dedicated time to rental management.
3. You Are Not Capable of Dealing With the Tenants
Screening Tenants is one of the difficult tasks. You may fail to screen 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 use a good property management company to manage the rental unit.
4. You Are Capable of Affording the Cost
Just like any other service-based business, the fees charged by management companies vary tremendously.
Most Property management companies charge 8% to 12% of the monthly rental income from the property owners for finding the tenant and managing the rental unit. 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 rent plus 8-12% of the rent on an ongoing basis. If you own several properties and have a property manager to manage those properties, then you might be able to get a better deal.
Note: Here is the list of best property managers in Oklahoma City that might be helpful.
5. You Are OK Giving up Control
If you hire a property manager, you will be giving all of the crucial controls over the property to the property management company. You may not have complete control over the rental properties, such as collecting rent payments, any maintenance requests, 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 professional property management company can make more sense if you’re willing to relinquish some power in order to save time.
Recommended Article: Get to know the tax benefits of owning rental property
6. You Want Peace of Mind
If you have confidence in the property management company you have hired to manage the rental property, then you might live in peace of mind, allowing the property manager to perform all of the property management tasks. All of the problems related to the tenant or the property or the tenants will go through your 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 the property manager you hire turns out to be non-communicative, then it might be stressful. For some landlords, managing the property on their own would give them more peace of mind than hiring rental property management services.
You can check out What a property manager does to know more about how they 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 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 property manager who is qualified as well as experienced. They will know how to find potential 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 manager can handle the eviction when necessary in a way that will save time and money while staying within the boundaries of the law.
Recommended Article: How to manage a rental property?
Things to Consider When Hiring a Property Manager in Oklahoma
You understand you should hire a property manager to manage your rental properties. But you may have forgotten about the challenges to face in the future without your last workout. Before hiring a property manager, you should research to see why hire a property manager and go for selecting the best one. Here are some ideas for you on how to hire a property manager for the best results.
Property Manager Should Have Experience and Track Record:
A property manager with a proven track record in the industry is important in solving all kinds of property and tenant problems. A vast portfolio of managed properties, references, and reviews helps you to get out of the complexities of managing properties. Experienced professionals have a deep understanding of property management best practices and are better equipped to handle various situations that may arise.
Property Manager Should Be Reputable with References:
Research the reputation of potential property managers before hiring them. Check online reviews, ask for references from current or previous clients, and inquire about their satisfaction with the services who have worked with them. A reputable property manager should be able to give you testimonials or references upon request.
Property Manager Should Be Responsiveness:
Effective communication is essential in property management. Ensure your property manager is responsive around the clock and quickly addresses your queries and concerns. Clear lines of communication will foster a productive and mutually beneficial relationship.
Property Manager Need To Have a Reasonable Fee Structure:
Discuss the monthly management fee structure upfront to avoid any surprises later on. Property management fees can vary depending on your property type, but it is crucial to understand what services are included and any additional charges you may incur. Compare the costs of different property managers to find the best value for your investment.
Recommended Article: How Much Do Property Managers Charge
Property Manager Must Have Local Market Knowledge:
Hiring a property manager who is familiar with your local market is more beneficial. They understand rental rates, vacancy rates, and market trends specific to your area. Local knowledge allows them to optimize their rental income and attract quality tenants.
Is Hiring a Property Manager Worth It
Dealing with the complexities of managing properties is overwhelming. Every owner has no experience managing their rental properties. Even having experience, it can be minimal stress for a few properties but can’t be handled alone for multiple properties. Multiple properties can have many responsibilities, like multi-tenancy lease, repairs and maintenance, early lease termination, rental screening, and eviction to be addressed promptly. Hiring a professional property manager solves all those related problems and benefits real estate investors to have a stress-free life without the compulsion to address them personally. The best way is to learn the ropes with professionals and avoid costly mistakes from self-management.
However, the decision to hire a property manager is a personal one. You need to weigh the advantages and disadvanatges of hiring a proper manager and decide if it aligns with your goals as a property owner.
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 are thinking of hiring a property manager in Oklahoma City, check out How to Choose a property manager for stress-free property management.
FAQs on Why Hire a Property Manager
What is a reasonable property management fee?
The reasonable 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 to hire a best 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.
Can I terminate the contract with a property manager if I'm unsatisfied?
Yes, most property management contracts include termination clauses. However, reviewing the agreement carefully and understanding the terms and conditions regarding termination before signing is important.
Can I still have control over my property if I hire a property manager?
Yes, hiring a property manager does not mean controlling entirely. You can discuss your expectations, preferred level of involvement, and specific guidelines with the property manager to ensure your needs are met.
Do I need a property manager to rent my home?
Deciding whether to hire a property manager depends on your experience and goals as a landlord. Property managers can assist with preparing the home, marketing, retaining tenants, reducing stress, and providing peace of mind. They handle tasks such as getting the house ready for rent quickly, marketing the property, ensuring tenant satisfaction, and managing property maintenance along with regulatory compliance. This can ease stress for landlords and provide confidence in the security of their investments.
How to evaluate whether a property management company is performing well?
You can evaluate property management companies' performance by following indicators:
1. Open communication.
2. Timely handling of maintenance/repairs.
3. Thorough tenant screening.
4. Maximizing rental income while minimizing vacancies.
