Should You Hire a Property Manager?
As of October 2020, there were almost 7 million units sold. Even during the COVID-19 pandemic, home buyers and property investors are still buying homes, and the market is booming.
Are you one of these investors who recently bought a new property? Have you’ve had your property for a long time? In either case, there will come a time when you’ll have to decide whether or not you should hire a property manager.
There are many benefits of property management, as they will help manage your properties and will be your eyes when you’re not there. However, do you really need one? Here’s what landlords need to know.
Should You Hire a Property Manager?
This question doesn’t have a yes or no answer. The answer ultimately depends on you, how many properties you own, how you manage those properties, and your goals.
Many investors manage their property full-time. In this case, it might make more sense to handle property management yourself, especially if you only own one property.
This is also ideal if you enjoy doing maintenance and repairs yourself or if you have a maintenance company you can rely on.
However, if property investing is what you do part-time, you have another career, you also own property in different states, or you own multiple properties, it is probably best to hire a property manager. Hiring a property manager is also the best option if you don’t like handling maintenance or dealing with tenants.
How Do You Monitor the Proper Manager?
Let’s say you decided to hire a property manager. How will you monitor them? This depends on who you hire.
If you hire an in-house manager, you’ll need to closely manage them. While third-party management companies don’t require you to oversee them, there are still responsibilities are your part. For example, you’ll have to monitor vacancy, income, and receivables reports.
Not only that, but you’ll have to know how to hire a property manager. No matter which option you decide, ask them about:
- Their experience managing rental units
- The services they can provide
- How they determine rent and how they collect it
- The contract and if you can cancel
- The fees
- If you pay when the property is vacant
- How they conduct property inspections
- How they will market your property
- If they offer an eviction warranty
- Screening and income requirements for applicants
- How they handle maintenance and repairs
- How they handle property updates
How do you know your property manager or third-party company isn’t working? Pay attention to red flags, such as vacant property and even crime on your property. You’ll also need to ensure they follow all regulations outlined in the Fair Housing Act.
Third-Party vs. In-House Management
We just discussed hiring a third-party property management company and an in-house property manager. Both options have their pros and cons. Which is the best option for your company?
Hiring an in-house property manager is a great time-saver. Even though you need to manage them, they can handle essential tasks that you don’t have time for. This includes hiring contractors and marketing vacant units.
Third-party property management companies are also another option. They can help with just about all vital functions, including processing tenant applications, writing up contracts, handling deposits and rent payments, keeping up with property maintenance, and more.
Most property management companies also deal with tenant complaints and tough tenants, which can relieve many of your headaches.
The downside of both options is you have to take a step back when managing your properties. Some property owners think managing their property themselves is easier. They may prefer working directly with tenants and can ensure everything is going smoothly with their properties.
Can You Afford to Hire a Property Manager?
No matter which option you choose, property managers come with a price.
Most property managers charge a percentage of your monthly income for the property. They may also charge a fee for tenant placement. These percentages and fees vary in price, so it’s best to take a look at your finances and know what you can afford.
Other Reasons to Hire a Property Management Company
Are you still unsure if you need a property management company? If so, here are a few signs that you need a professional to help you out.
You Have No Experience Managing Properties
Are you a new real estate investor? If so, hiring a property manager will be beneficial. While this is an expensive learning opportunity, you can ensure your properties are in top shape.
However, there are expensive drawbacks to errors, such as taking too long to fill a vacancy, not fixing an issue in a timely manner, or hiring a bad repair contractor.
You Don’t Have Time to Manage Your Property
Many real estate investors only manage one or two properties part-time. They may have another business, another job, or other priorities. If this sounds like you, you likely don’t have time to manage your properties.
This is why a property manager will benefit you. A property manager will take over the daily operations of your property, ensuring they’re kept in good standing when you’re not there.
You Have Cash Flow Problems
Whether your cash flow problems stem from a high vacancy rate, spending too much on repairs, or other problems, there could be some internal issues you need to improve. While property managers cost money, one of the biggest property management benefits is you’ll make your ROI.
A good property manager can hire effective repair professionals and will screen tenants well, ensuring you don’t lose money. Since they also understand landlord laws, they can offer a blanket of legal protection, so you don’t lose money in a lawsuit.
Hire a Property Manager Today
There are many reasons why you should hire a property manager, but the best course of action is to find the best professional to handle your property.
If you live in Orange County, you don’t have to look far. We don’t have long-term contracts, renter’s insurance coverage, 24-hour maintenance, in-house collections, pet screening, and more. Contact us today.
