If you own a rental property or are looking to get into real estate, hiring a property manager can be an excellent investment, but it can also have some potential drawbacks. However, the decision to hire a property manager ultimately depends on your individual needs and preferences as a rental property owner. If this is you, you’re in the right place. Read on to learn the pros and cons of hiring property managers for yourself.
Pros of Hiring Property Managers
Huge Time Saver
A property manager will manage a variety of tasks related to your rental property which ultimately saves you a lot of time that you can use to focus on other things. Some common tasks a property manager will take on usually include advertising the properties, screening potential tenants, handling repairs and maintenance, collecting rent, dealing with tenant issues, and overall damage control. Not only is hiring a property manager a huge time saver but it also will likely save you a lot of headaches and stress.
Screens Your Tenants
Having good, reliable tenants is incredibly important for your rental property. A professional property manager is experienced in choosing reliable tenants. They typically will perform thorough credit screenings, background checks, and rental history to ensure you have tenants who pay rent on time and care for your property as if it was their own.
Legal and Professional Knowledge
When it comes to owning a rental property, the legalities can be tricky. Experienced property managers have strong knowledge of landlord-tenant laws and regulations. They can ensure you’re in compliance with local, state, and federal laws and help you navigate any legal issues that may arise.
Lower Vacancy Rates
An experienced property manager knows the real estate business and will often have strategies in place to reduce periods of vacancy and ensure your property is consistently rented. They are knowledgeable and resourceful at advertising and marketing vacant properties, helping you find new tenants quickly.
Act as a Mediator
As a property owner, you want to ensure your relationships with tenants and vendors stay professional and courteous. However, you’re bound to come across issues, such as people paying rent late or not completing the work on time. For some people, confrontation can be difficult. With a property manager, if you have issues with vendors or tenants, they can act as the middleman so you don’t have to always be the bad guy. This way you can protect your relationship with tenants and vendors and don’t have to deal with common issues.
Reliable Network of Contacts
When you own property, you’ll likely need to outsource work such as contractors, repairmen, and other service providers. A good property manager usually has a strong network of reliable vendors to ensure all maintenance and repair issues are taken care of promptly and at a reasonable cost. This way you know you’re getting quality work and not getting ripped off.
Cons of Hiring Property Managers
A property manager typically gets paid a percentage of the monthly rent or a fixed salary. In the list of pros and cons of hiring property managers, this is certainly the biggest “con.” The industry average varies between 8 to 12%. This base rate may include different services with different companies, so get a detailed list from any prospective manager. While hiring a property manager does come with a cost that ultimately cuts into your profits, the time and headaches you’ll save tend to make it a worthwhile investment.
Letting Go of Control
When you hire a property manager, you’re allowing them to make decisions when it comes to your property. For some property owners, giving another person control over their real estate investment can be difficult. However, with a professional property manager, you can feel at ease relinquishing some control.
Finding the Right Manager
Not all property managers are equal when it comes to their experience, reliability, and professionalism. Finding a competent and trustworthy manager that shares the same values and approach can sometimes be a challenge. Word of mouth is golden in this case. When checking reviews, remember that renters tend to make negative reviews quite easily, so scour the details of reviews to get a true sense of how your property will be handled. Ask many questions, including what the typical vacancy rate is for their firm. Anything over 1 month is a red flag.