Authored by Geoff Vaughan in Real Estate
Published on 02-07-2009
When owning a rental property, you have to take several things into account when deciding whether or not to hire a property manager or to manage the property yourself. You need to think about where the property is located in relation to where you live or work, how much experience you have in contracts, how much extra time you have to devote to potential maintenance emergencies, and whether or not you want to deal directly with the tenant. You also need to take into account whether or not you can afford to pay someone else a percentage of the rent, repairs, and other various commissions that come with using a property manager.
If you do not live close to the property, your best option is to hire a Property Management Company, as it is very tough to take care of a rental property when you aren’t within driving distance. This company will manage every aspect of your property while you are away. You can even give the property manager the authority to make decisions for you, such as whether or not to paint in between tenants, to fix certain items, and to decide if the potential tenant will be good for your house. If you have a good property manager, all you will have to do is pay for repairs and then sit back and collect the rent check each month.
On the other hand, if you do not have a busy job and live close to the rental property, you may want to consider managing the property on your own. Keep in mind, however, that being a landlord is more than just getting a monthly paycheck. You have to place ads to get prospective tenants. Then, you have to figure out the best way to check their background to find out if they have had previous problems paying bills on-time. If you do not get rent, you need to personally collect the rent. And when something breaks, you have to determine if you will hire someone else to go into the property, or if you have the experience to fix things on your own. If you do not have time to devote to finding maintenance support or doing the work yourself, there is the option of hiring a property management company just for maintenance, for a certain fee.
Property managers take the stress out of owning a rental property. The key is to find a reputable company that will do a great job marketing and taking care of your rental. The cost varies depending on whether or not you want an all-inclusive company, or someone to just do part of managing (i.e., just finding tenants, just collecting rent, or just performing maintenance). Most all-inclusive Property Managers will charge a percentage of rent to put someone in the house. This can be as high as one-month’s rent, or can just be the cost of advertising the property. Property Managers generally charge between 4-15% of a month’s rent. Ten percent is most common for full-service Property Management.
The key to having a successful property management relationship is to conduct a lot of research of companies in the area where your rental property is located. Most people have the best luck with the companies that have been around for years, and have a great reputation. You have to consider that not only would you want to do business with them, but potential renters will also want to do business with them so that your rental property will not be vacant long. Most people find that for the extra time that they will have each day to not worry about the rental it is worthwhile to hire a Property Manager.