Property managers can help maintain and lease your property.
Set your property management expectations before starting interviews.
Be sure to look for potential warning signs before hiring a property manager.
Owning rental properties can be a lucrative investment move, but like any home or apartment, these properties require a good deal of care and maintenance. If you’ve reached the point where the upkeep of your rentals is taking up too much of your valuable time, you consider hiring a professional property manager.
Property managers and property management companies can help ease an owner’s burden, particularly if you live far away from your rental or you own many properties. Finding the right match for your needs can be a process, but since this person or company will serve as a reflection of you, it’s important to choose the best fit. Let’s review the ins and outs of hiring a property manager.
What Does a Property Manager Do?
Before you start searching for a property manager for your rental properties, stop to consider the type of tasks that they will take off your plate. Here are some typical duties of a property manager or property management company:
Collect monthly rent
Advertise rental vacancies
Host in-home tours for prospective renters
Vet potential tenants, including credit and background checks
Handle tenant complaints and issues
Perform rental maintenance and repairs
Enforce the lease agreement
When Should I Hire a Property Manager?
Whether you are a seasoned rental property owner, or this is your first time exploring the real estate rental game, there may come a time when you can’t do it all by yourself anymore. At that point, most people opt to start outsourcing tasks to a property manager.
Property management is much more than just collecting rent from tenants each month. There are many behind-the-scenes responsibilities that managers take on, and they act on behalf of the owner. Here are some signs that it may be time to hire a property manager:
You no longer have enough time to maintain the properties.
You live far away from your rental property.
You own too many properties to manage alone.
You no longer want to deal with the daily management responsibilities.
How to Hire the Right Property Manager
Finding and hiring the right property manager can be a lengthy undertaking, particularly if you own several properties or a large apartment complex. A good manager can help streamline processes and reduce your risks and potential liability.
Ask for Recommendations
You can start your search by asking for recommendations from friends, family members, or colleagues who also own rental properties. Local real estate agents may also be able to share names of managers they know and trust.
Interview Multiple Candidates
Similar to hiring a real estate agent, you should talk and meet with several potential property managers before making your final decision. Be sure to interview at least three candidates, and prepare questions and notes for your interviews.
Set Your Expectations
Do you need someone who is willing to perform routine maintenance? How will the manager handle unpaid rent, evictions, or difficult tenants? How fast do they need to fill vacancies?
These are examples of questions you need to determine the answer to before meeting with property management candidates. By setting and expressing clear expectations, you’ll be able to find someone whose level of involvement matches what you need.
Preferred Type of Communication
Talk with your property management candidates about how and how often they communicate with other homeowners and then decide whether you agree with that set-up. For example, are you expecting updates from the property manager daily, weekly, or monthly? Do you prefer phone calls, emails, or text messages? Figure out your preferred method of communication before diving into a property management relationship.
Of course, you should prepare to talk with property managers about their rates and fees. Ask questions like: What fees are you willing to pay? What is not included in the fees? How will you deal with invoices for any extra charges?
Benefits of Hiring a Property Manager
When you’ve reached the point of being willing to lose a little money to gain more freedom from your rentals, a property manager may be what you need. These are some of the benefits of hiring one:
Hiring a property manager means all those hours you spend dealing with broken locks and leaking pipes will be yours again. Someone else will handle emergency weekend calls, leaving you with extra time for other (and more enjoyable) activities.
If you live two states away from your rental unit, your response time to tenant’s requests will inevitably lag. Tenants will appreciate having someone close by who can answer any questions or complete needed repairs, and be more likely to renew their leases.
Less Hassle With Payments
Since property managers are responsible for dealing with deposits, rental fees, and problems with late payments, you can rest assured that they will tackle any money problems. That means you can avoid chasing down payments and leave the lease agreement enforcement to the property manager.
Cons of Hiring a Property Manager
While hiring a property manager or management company can help give you peace of mind, it also has the possibility of causing more stress. No one is perfect, and even if the manager you selected seemed great on paper, they may not be taking your best interests into account. Here are some of the cons of hiring a property manager:
Unfortunately, bad property managers do exist, and they can wreak havoc on your rentals and your bank account. That’s why it’s essential to properly vet your property manager to ensure they are trustworthy and have your property’s best interests at heart. You can also reach out to other homeowners who use your potential property manager to get more information about how well they work with clients.
The major drawback of hiring a property manager can mean taking part of your rental profit out of your pocket. Property managers charge their base fee and additional fees for everything from listings to extra maintenance. Shop around to multiple companies to ensure you’re getting the best service for the price.
Lack of Communication
If you want to know everything happening with your property, finding a manager who is comfortable with frequent communication may be a challenge. Many property managers and management companies prefer owners to take a hands-off approach, giving them the space to do their job.