If you're considering hiring a property manager, you're likely wondering if it's worth the money to pay someone to handle your property management tasks for you. This is not a decision you should make lightly, as there are a number of factors that go into whether you should have a professional taking care of your rental property and interacting with your tenants in your stead.
A property manager is a professional who performs all, or nearly all, of the tasks that relate to renting out your property to tenants. A property manager will advertise and show your property, screen and interview applicants, prepare the lease or rental agreement, collect rent and fees every month, and ensure the proper maintenance and upkeep of your property. Many property managers will also take care of the more unpleasant tasks of renting, such as pursuing evictions or negotiating rent raises.
The most obvious advantage of hiring a property manager is that you are free from the daily and monthly tasks required of a landlord. If you're too busy or simply don't want to take care of the myriad responsibilities -- much less field midnight calls from tenants about burst pipes -- hiring a property manager may be right for you. A property manager may also be in your best interests if you live far from your rental property, which makes if difficult to show the property, interview tenants, perform inspections and upkeep, or carry out any of the other tasks that require a physical presence.
If you depend on every cent of the rent that you receive from month to month, hiring a property manager may not be right for you. A typical property management company will often charge between 5 and 10 percent of your monthly rental revenue, so this is a clear disadvantage if you don't have the revenue to spare. Additionally, if you prefer to be hands-on with your investment, you may not want to hand the reins to someone else; in this case, you'll be more comfortable without a property manager.
If you decide to hire a property manager, perform thorough research before signing any contract. An ideal property manager will have good working relationships with both the property owners and their tenants and be extremely accessible. Conduct online research; there are many websites that host reviews of property management agencies, both from the tenants' and the owners' perspectives. When meeting with a potential property manager, bring a list of questions you'd like answered in full. Ask that they discuss their fees and what services are not provided in the management contract.
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