If you have invested in one or more rental properties, you have the option of managing the properties yourself, perhaps with the help of a few employees; or hiring a property management company who can handle most of the work for you. To help you determine if you need a property manager, look into your current and future situation, and ask yourself these questions:
- Do you live close to the rental property?It’s important for the property manager to be readily available to deal with the many issues involved in rentals, such as tenant complaints, building maintenance, filling up vacancies, and more. If you live far, it will be harder for you to respond to these issues in a timely manner. Traveling between your home and the rental will also cost you more. If you can’t live close to your rental, hiring a property manager could be the better option for you.
- Do you own several rental properties?It’s difficult to effectively manage several properties at the same time. The more tenants and rental units you have, the more issues you need to deal with. A property management company can relieve you of the stress and difficulty in managing several rentals.
- Do you prefer to personally manage your rentals? If you’re the type who wants to get your hands on every aspect of managing your business, you might not need a property manager. However, ask yourself if you’re prepared or equipped to deal with common rental issues.For example, do you know what it takes to fill up a vacancy in a short time? Do you have the right maintenance contacts or network? Note that a single mistake can greatly affect your profitability. If you feel you have yet to acquire the necessary skills and knowhow in property management, you might be better off hiring an experienced professional.
- Do you have time to manage your rentals?Even if you have the skills, you may not have the time needed for the job. Perhaps you have to work full-time, or you have other ventures and investments to attend to. In this case, you can greatly benefit from hiring a professional manager.
- Are you willing to transfer control of your rental to a property manager? A property manager typically takes over most of the rental’s operations – from filling vacancies to hiring contractors to bookkeeping. Ask yourself if you’re comfortable with entrusting your investment almost completely in the hands of someone else. If not, consider managing the property yourself.Related to this, you could be liable for mistakes or violations committed by your property manager in the course of doing their job. Ask yourself if this is something you’re willing to take on.
- Can you afford a professional manager? Typical property management fees range from 5% to 10% of the collected rent. Some property managers also charge additional fees for filling vacancies and other “extra” work. Consider if you can afford to pay this much for the services of a property manager.
To learn more about your options in hiring a property manager, give Ray Amouzandeh of TARGA Residential Brokerage a call at 415-494-7009, or send him a message here.