If 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
…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”
In 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:
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.
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.
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.
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.
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).
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.
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.
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.
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.
– Angie’s List Pays for Itself in a Single Use
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.
Appfolio put together a nice “infographic quiz”. Take the quiz below to find out if you should hire a Property Manger!