Should I Hire a Professional Property Manager?

Written on October 17, 2013 by , updated on April 11, 2017

Should I Hire a Property ManagerIf you are a small-asset landlord, you’ve probably asked yourself “Should I hire a Property Manager?”.

Hopefully, this article will help you decide if hiring a property manager is right for you.

Property Managers can be incredibly helpful, but are also a luxury that many landlords simply cannot afford.

It’s true, thousands of Landlords manage their properties with very little effort – and have set up their rental businesses to run on autopilot.

The trick to being an independent landlord is to first establish the proper processes, leverage available tools and resources, and build multiple rental form templates for use, over and over again.

Repetition is the secret ingredient

checklist…but building repeatable processes can be difficult, and it’s not for everyone.

I’ve been a landlord for many years, and have multiple properties in a 3 states.  I consider myself to be very detailed-oriented, and I’ve always been up for the “Adventures in Landlording” – but I definitely know my limits – and so should you.

There are many reasons why a Landlord should hire a Professional Property Manager. Deciding whether or not you should hire a manager doesn’t have to be an agonizing decision.  It really just depends on your own needs, level of commitment, and expectations.

To Hire or Not to Hire…

  • If you want to hire a Property Manager, but need cold-hard numbers first, then look up a local property manager and ask for an estimate.
  • If you’re ready to brave it alone, check out our tips section, which gives short, practical advice about being a D-I-Y landlord.
  • If you’re still unsure, I invite you to ask your questions in the comments section below, and I’ll try to help you decide!

What does a Property Manager do?

A typical property manager will interact directly, on your behalf, with applicants and tenants.  Managers will usually market and advertise your rentals, meet with prospects to host showings, collecting rent, deposit money to your bank account, and coordinate repair issues.

They are also the first line of defense when responding to tenant complaints and will even stand by your side when you have to pursue an eviction or get sued.

They should have the “Heart of a Teacher”

teacherIn my opinion, an excellent property manager will have the heart of a teacher, and voluntarily keep you updated with regular communication.  Above all, the main purpose of a property manager is to give you peace of mind that your investment is being handled with care.

Unorganized property managers will try to manage everything, but still turn to you for every issue and request – forcing you to be involved and thereby not reducing your stress level.

Nolo’s article “How to Hire a Resident Property Manager“, covers the ways to interview/negotiate a property manager’s services and fees.

10 Things to Consider before Hiring a Manager:

  1. How many properties or rental units you own?

    Most newbie landlords can handle 1 or 2 units on their own.  However, when you start to deal with 5-10+ properties and dozens of tenants, you should consider turning some of them over to a professional – especially if you have a separate full-time job.

  2. How far away do you live from your properties?

    If you live over 50 miles away and have more than 2 units, you should consider talking to a local Property Manager who operates in a closer proximity to your rental property. If you do choose to be a long-distance landlord, you should create a list of favorite vendors that you can call upon in an emergency.

    Related:
    – Managing a Rental Property From Another City
    – How to Build a Little Black Book of Contractors

  3. Are you detailed?

    Perhaps property management does not interest you, or you are not detail oriented.  If you are not an organized person, then you should consider giving the responsibility to a professional.

  4. Do you have the necessary KSA’s (knowledge, skills, or abilities)

    If you have no idea what you are doing, and don’t want to learn, then don’t try to do it yourself.  However, if you don’t mind the adventure, you can study websites like Landlordology.com to learn the art of landlording.

  5. How busy are you?

    Perhaps you are already super busy and can’t dedicate 2-10 hours a month for your properties.  Unless you have dozens of tenants, I believe most landlords can find time to handle it (if they want too).

  6. Can you afford a property manager?

    A typical property manager takes 1 month’s rent as their flat fee. Others take a monthly cut of 4-10% of the rental income.  For some of my properties, I would be loosing money every month if I hired a property manager.  But for other properties, I have more than enough rental surplus to pay for a manager.  I think a great property manager with a heart of a teacher, is worth his/her weight in gold.

  7. Are you struggling to fill your vacancies and don’t know why?

    If you feel like your property is vacant too often, then perhaps you need help with your marketing.  If you aren’t sure what else you can do, then consider hiring a manager because they often have tried-and-true marketing techniques – albeit it’s no guarantee.

  8. Do you have a service-oriented personality?

    If you are not a “service” person, and are often bittered by regular maintenance calls from tenants, then you probably should take the role of silent investor, and leave the management to someone else.

  9. Do you mind working with contractors?

    Contractors are often needed to maintain the property.  If you don’t feel comfortable researching, hiring, and double-checking their work, then you should probably hire a manager.  As a landlord, I use Angie’s List to research all my contractors before I hire them.

    Related:
    Angie’s List Pays for Itself in a Single Use

  10. Is your property subject to complex ordinances or an affordable housing program?

    Many state and local laws are overly complex and require you to obtain extra certifications and take classes.  If your property is subject to an affordable housing program, a (legitimate) property manager will ensure that you don’t break any rules.  However, if a manager does get into legal trouble, you are still responsible as the home owner, and can be held liable.

Still Unsure?

Appfolio put together a nice “infographic quiz”. Take the quiz below to find out if you should hire a Property Manger!

Source: AppFolio.com

Should I Hire a Property Manager Infographic

photo credit: kcolwell, cybrarian77 via cc
Get Updates by Email!

Join 180,000+ 
Landlordologists

  • Weekly Articles & Tips
  • Updates on Rental Laws
  • ​Useful Tools & Resources

35 CommentsLeave a Comment

  • Omar Garcia

    The reality is that you have to plan on NOT hiring a property manager BEFORE you buy a property. Here are the rules I follow:
    1. Keep your properties less than 30 minutes away from where you live. If you live further than that, it will be difficult for you to manage yourself (or want to).
    2. Find a damn good and reliable handyman. This basically IS your property manager. This has to be a guy that you can call to basically solve anything. If he is really good, more often than not he has good contacts to do anything he can’t
    3. Buy at the right price and keep the rents low. The only time that you really would need a property manager is to deal with leasing and evicting tenant. If you charge below market rents, you will get flooded with good applicants, that usually will pay on time, want to stay and do not want to bother you because they want to keep the rent low.
    4. Use an online property management system. I use Leaserunner and I LOVE it. Makes it soooo easy to manage my renters.

    • Lucas Hall

      Hey Omar,

      Great rules! I think finding a trustworthy handyman is key! At times, I prefer to give the handyman a copy of they house key, so I can send him over to fix stuff without me or the tenant being available. But you have to 100% trust the handyman because you could partially be liable if something were to happen because the handyman took advantage of the situation. I also prefer to use lockboxes in which I can give access the combo to the handyman, but change the combo whenever I want.

      Using an online property management tool is also a smart idea. I’ve never used leaserunner, but I have had a lot of success with Cozy and Buildium. Cozy works a better for the small asset landlord in my opinion. I also work there :)

      Here are two related posts:
      http://www.landlordology.com/little-black-book-of-contractors/
      http://www.landlordology.com/use-a-lock-box/

    • Helen

      Wouldn’t pricing too low encourage tons of less than desirable people, too?

      • Lucas Hall

        Indeed, but that’s where a thorough screening process comes into play. There are quality, reliable renters at every price point.

        I tend to try and get the most I can for each rental, but be slightly less than competitors.

      • Omar Garcia

        The key is to price “below market” That could be anywhere from a low income neighborhood to a professional class area. Below market rents will drive a ton of applicants that you can be choosy about and tenants that will make sure they pay the rents because they can not get that deal again. In the long run you end up making more money with much fewer headaches.

  • Jan Morrison

    Lucas, your infographic is great. My client uses the same software and I’d like to hear how you made the image. Thanks!

  • Jessica

    I am new to having a property manager. She informed me today that I will not be seeing the lease she signs with the tenant to rent my own property. Is this typical with property managers?

    • Lucas Hall

      Hi Jessica,

      No this is not normal. It sounds sketchy.

      Also, in my opinion, the lease should be in your name (the landlord). It should be an agreement between the landlord (i.e. Property owner) and the tenant, not the PM and the tenant. The property manager is the middle man and doesn’t actually own the property. If you need to sue a tenant, you would have a harder time doing so simply because you would have never actually had an agreement with them since your name was not on the lease.

      Whenever a “middle man” refuses to show you a paper trail, run away. They are usually hiding something. I would be concerned that the lease is either heavily weighted in the tenant’s favor (which makes the PM’s job easier) or the PM is not being honest about he money and doesn’t want you to know. I’ve seen PMs take a little off the top in situations like this.

      Be careful and get EVERYTHING in writing. There’s no legitimate excuse to hide the lease from you.

  • Elizabeth

    Great article Lucas, the information you provided is very extensive! My company, Reynolds Realty Advisors, handles property management and we also utilizes this infographic as a tool to help our prospective clients decide if hiring a property manager is right for them!

    Please feel free to visit our website: http://www.reynoldsrealtyadvisors.com to check out other articles on property management, or find helpful information for anyone looking to make the most out of their properties or rentals!

  • April

    Hi, we have had the same property manager for several years, and he only seems to become useful right around the time our contract is about to expire… Our current tenant is moving out and our property manager has now become our Listing Agent for a separate fee. Is this normal? I read your comment above under “What does a Property Manager do” and now I feel like I may have been bamboozled.

    • Lucas Hall

      Hi April,

      It all depends on how much work you want to put in. Personally, a monkey can create a craigslist rental ad, and it would only take him 10 minutes.

      Typical property managers make their money on fees. So the original contract is to “manage the property”, but then you have to pay extra if you want them to list the property, and if they find a tenant, there is usually a “finders fee”. At the end of the day PMs usually cost the landlord a lot of money.

      The best PMs will charge a percentage of the monthly rent (or take one month’s rent) and do everything. But even then, it’s still 1/12th of your rent income.

      I’m a DIY landlord, and with tools like Cozy (https://cozy.co) you can manage the property yourself. You can place the ad on Craigslist and Postlets.com, and find tenant’s yourself. If you are a long-distance landlord, you might need to hire someone (perhaps a PM), to show the property to potential tenants that want to see the place, but nothing more. Then, just hire contractors to make repairs and force the tenants to be present when the contractors arrive. With Cozy, you can collect applications, screen tenants, and collect rent online, without the need for a PM.

      Personally, I don’t have the margins to hire a PM. The good ones are worth their weight in gold, but unfortunately, they are far and few between.

  • Helen

    My grandma is leaving me her home. She raised me and I’ve always lived with or near her. I’m currently living/working in New York and making good money/benefits. My gma’s health is worsening so I’m trying to decide what to do if she passed away. The job here isn’t going to last forever bc I’m a caretaker of a 92 yo woman. Once she passes, I will go back home but as long as the job is available, I can’t leave it. So I’m not sure if I should rent the house for a year using a mgmt company or let it sit empty and have neighbors watch it. It would probably take 5-10k in updates/cleaning to get it looking nice. I could get about 1500-2000/month in rent. I’m just not sure what is the best option. We have let it sit for 4 months when we went to California but I’m worried a year might bring burglars. How do you decide what to do? The house is in Indiana and my family lives in michigan so I don’t really have anyone nearby to check in once in awhile.

    • Lucas Hall

      Hi Helen,

      It sounds like your options are:
      1. Leave it empty and risk burglary, damage, no income.
      2. Hire a PM
      3. Be a DIY landlord and manage it yourself.

      A PM will take 10-15% of your profit, but if you find a good one, that would definitely be the easiest solution for you. Even if you put in 10K in renovations, over the next month or two, you’ll still come out ahead if you rent it for 2k/month – assuming there is no mortgage on it.

      If you want to keep more of the profit, then you could try to manage it yourself. Lots of people (including me) manage long-distance rentals, but it does take a lot of work to get the initial processes in place. You would have to hire a local repair man every time something happened, and a neighbor to generally watch over it. But there amazing tools like Cozy (https://cozy.co) which can take care of the technical hurdles – but you still have to be the point of contact for your tenants, and manage repairs.

      I hope that helps you decide.

      • Helen

        I don’t think I would be able to manage long distance. I’m not even sure renting it is a good option since it would require a lot of work to empty and update. Knowing my luck, I’d get it ready and get a year lease signed and my New York job would end a week later. Hopefully, my grandma hangs in there for a long time. I love her plus it would give me time to bank more money. But if god forbid, something happens, it might be best to have the neighbor check on it, inform police no one is there and hire someone to cut grass. It’s a corner property with condos running down the side street so there’s a ton of eyes looking out for my gma.They call the cops a lot if they notice anything unusual. Even on family in garage they don’t know!! The income for the year may not really be worth the work required, the worry about who’s in the house (how they treat it) and the loss of the primary resident property tax credit. When I go home to visit, I’ll stop & talk to a property mgr to get advice. Tyvm!

  • Susie

    Thank you for you information. I think it’s good for us to hire property manager. Our new tenant( only 14days) keep sending us personal e-mail of little things . We asked him to do checklist and we can go through together. but he keep sending E-mail.. Not related to repaire . His personal preference which nothing to do with functional of house. Also he is runing his business in our rental which is not zone for it. He is already voileted our lease agreement .. Shall I report it to city? I really need help !

    • Lucas Hall

      Hi Susie,

      If he’s violating the lease, then you can tell him to fix the violation or you will terminate the lease. It’s really that simple. Then you wouldn’t have to deal with him anymore if he leaves.

      Be sure to check you state laws on the amount of notice you need to provide before terminating a lease for a violation: http://www.landlordology.com/state-laws

  • Margot

    How do I get my forgetful tenant to pay the rent on the 1st of the month? She says her bank won’t let her do a money transfer to my bank. Every month I have to call and remind her to pay the rent. How can I make this easier?

    • Lucas Hall

      Hi Margot

      The key is to use a tool that makes it automatic. The problem you are having is common, and exactly why Cozy was created. It’s free to collect rent online with cozy, and best of all, it will force your tenant to make rent automatic. No more excuses!

      Check it out at https://cozy.co

  • Blanca

    Hi,
    I am one of the three owners of the prperty and I live in Florida. My sister that lives about 15 minutes from the property is the one acting as a PM. From the beggining she makes decisions about repairs etc. I dont have a problem with that. The Big problem i have is that she does not want to share paperwork – like estimates for repairs, expenses for the property. Gas, Electricity, water, etc. she tells me that I dont trust her… am I wrong in wanting to know the expenses for the prperty?

  • Judy Wilson

    As my properties have been admitting more tenants, I’ve been spending more time managing them than I can afford. I have another job that I have to focus on, so managing my properties well enough has been pretty difficult. After looking at this chart, I can see that hiring a management company would be the best choice for me considering my situation. I should hire one that will help with taking care of my tenants and with repairs so that I can focus on my job. Thanks for posting this!

  • emily bennette

    I like that you pointed out that if you don’t live close to your rental property it might be very difficult to manage it yourself. Having a property manager seems like a good idea if you are in that situation. That way your property will be taken care of and you don’t have to do the work.

  • sam wilkins

    Great tip about asking for an estimate from a local property manager if you want to hire one. That way you can be sure you will be able to afford one. My husband is considering hiring a property manager, so I will suggest he asks someone for an estimate before he decides.

  • Lesley Chamberlain

    We have 2/3rds of the shared freehold in a block of three flats. One is leasehold. The leaseholder has forced a manager on us through the First-Tier Tribunal. You don’t need to know the details. Of course we find it unjust but we have to live with it, and we’re old and upset. Can we get someone – a laywer, another manager of our choice – to interact with the Tribunal-appointed manager on our behalf? We don’t as such object to a manager, but we’re bruised and it causes us terrible personal distress. It ought not to involve much work and in any case it might be worth the outlay to avoid the trauma. Otherwise the upset will force us to move – which we don’t want.

  • Lillian Schaeffer

    This is some great information, and I appreciate your point that a property manager can help if your property is more than fifty miles away. My husband and I are going to be moving, and instead of selling our house, we want to rent it out. We’ll be around a hundred miles from it, so we’ll definitely look into hiring a manager to take care of it for us. Thanks for the great post!

  • Nanci Wright

    would like to join in the discussion.i am a Professional Property Manager for the past 34 years.

  • Jasmine Kish

    Hi Lucas, as a first time landlord, I am very intimidated by the process of managing a property on my own; but also do not want to lose too much money to hiring a property manager. How much is too much for the manager to charge?

    • Lucas Hall

      Hi Jasmine

      I think anything over 10% of the rent per month is highway robbery. You can find PMs who will do it for less. Or you could save that money and do it yourself through Cozy.

  • Anita Young

    Our realtor has always charged us one month’s rent each year to rent or renew our rental properties in Florida. Recent move out needed $8K of work to bring it back to rentable condition, what should we pay her to manage this project? For the last 10 years, she has collected the one months rent just to renew the lease-very little work.
    Do we need to compensate her this time as it required more work?
    If so, what should we pay her?
    Thank you!

  • Kofi Bimpong

    I plan on renting my place and I’m considering hiring a Property Manager firm. However, a good friend of mine who happens to be a realtor has already begun doing the legwork for getting the property rented. My question is…If I’m able to rent this property to a tenant through my realtor friend, could I still hire a property management company to handle any repairs that the tenant requires on the premises?

    Thanks for your assistance!

    • Lucas Hall

      Hi Kofi,

      If you’ve signed a contract with the property management company, you’d have to do whatever is stated in the contract.

      If you haven’t already signed a contract, I would encourage you to consider managing the property yourself. It’s not that hard, and it would save you upwards of 17% of your rental income. You can do most everything you need to do with the rental via Cozy (www.cozy.co) – and it’s FREE!!!

      You would still need someone to be at the property from time to time, but you could hire a PM to do a-la-cart services, like inspections and move-ins/move-outs.

      If you really want to be hands off, then sure, hire a PM, but make sure you get a bunch of good references. If they are lazy or not attentive to detail, they will cost you even more in vacancy and deferred maintenance.

  • Elly

    Your answer lifts the ineleligtnce of the debate.

  • Alex Dean

    Hypothetically, I am a landlord of a small complex and am always wanting my property to succeed. A fellow landlord friend suggested to me that I look into hiring a property manager to help me out. Before I agree to one I want to make sure that I know what to expect from one. It’s good to know that they work on the behalf of me, and will do a lot of things like collecting rent and host showings. This will really help with taking the stress and lighten my load. Thanks for the insight!

  • El

    Hi, we currently have one rental property under our belt in the Atlanta area. We charge 1400 for it, and the tenant pays the power bill while we maintain the water. This was decided because we are running into late payments and it is just October. I believe in showing grace but we rented it out for profit. We’re expecting our first little one and opening one salon location. My husband still works but I manage the property. At this point im wondering is it worth giving a property manager a try for one property or should we wait until we acquire another one. Feedback please, and the family is husband and wife 3 kids and not section 8

Join the Discussion

Your email address will not be published. Required fields are marked *

 characters available. Be short, sweet and to the point.