As a landlord, you have a variety of responsibilities regarding your property and your tenants. Depending on your lifestyle, there are many reasons you may want to consider hiring additional help to take care of all your obligations. A professional property manager can help you take care of specific duties or provide complete management of a property when you’re miles away. However, deciding whether you need one isn’t a choice to take lightly. Learning more about the role of a manager and how your unique lifestyle affects your choice can help. This guide will help you understand what a property manager does, the pros and cons of hiring one, and how to find a professional you can trust.
What Does a Property Manager Do?
A property manager can take on many of the responsibilities that go along with property protection and maintenance, and communication with tenants. The individual or company can manage different property types depending on the property manager, from single-family homes to multi-family dwellings. Depending on your needs, this manager can take care of all services, from marketing and securing tenants to collecting monthly rent and maintaining the property. However, you can choose to take care of certain obligations yourself. They may take care of any or all of these responsibilities.
- Advertise and market the property
- Interview and screen potential tenants
- Execute the lease agreement
- Collect rent
- Manage maintenance and repairs
- Lastly, evict tenants on your behalf
Why Should You Hire a Property Manager?
While some landlords choose a DIY method to manage rental properties, there are many reasons you may choose to hire a property manager. For instance, if you manage multiple properties, you may need additional assistance to take care of the responsibilities of caring for multiple properties. Some tasks may be outside of your abilities, or you may live a considerable distance away from the property.
For most landlords, the idea of hiring a property manager comes with specific trials related to managing the property alone. If your current lifestyle makes it difficult to interact with your tenants and check on your property frequently, you may choose to hire a property manager to take care of day-to-day operations while you maintain specific duties like finding and screening tenants. When you feel that managing a property alone is outside of your current abilities, it’s a good idea to consider the pros and cons.
Pros and Cons of Hiring a Property Manager
There are several things to consider before you decide to hire a property manager. While shifting responsibilities can take some work out of your schedule, you’ll also be giving up an element of control and have to consider the costs of hiring a professional. Consider these pros and cons before hiring one to take care of your rental property.
- Filling vacancies will likely be easier
- Avoid researching local rental rates
- Confidence to invest in distant properties
- You could save money by relying on the property manager’s resources
- Avoid dealing with tenant and vendor relationships
- Avoid rent collection duty
- The ability to invest in multiple rental properties
- Avoid dealing with rental laws and legal issues
- Lastly, gain knowledge about rules and regulations of affordable housing programs
- You’ll take on the new responsibility of being an employer
- The added cost
- Giving up some control
- Additional liability issues
- Lastly, the tenant screening process could be lacking
Advantages and Disadvantages to Self-Managing Your Property
After considering the reasons you might choose to hire a property manager, it’s a good idea to weigh the advantages and disadvantages of both choices before you make your final decision. In some situations, hiring a property manager may be a necessity. For instance, if you intend to rent a property in another state, it’s unlikely you’ll be able to handle all the responsibilities. However, if you live nearby and only rent out a single property, management costs may not be worth the payoff.
No matter your circumstances, self-management may not be for you if you:
- Will be uncomfortable collecting rent or evicting tenants
- Don’t have the skills or ability to maintain the property or hire professionals to take care of maintenance
- Have difficulty filling vacancies
- Have too many properties to handle properly
- Lastly, don’t understand local landlord-tenant laws
Where to Find a Property Manager
Making the choice to give an individual access to your rental property can be difficult. Ensuring you hire a trusted professional can help you feel more comfortable with your choice. No matter whether you choose a professional management company, or an individual with experience, it’s important to conduct thorough research before hiring someone to care for your property. There are a variety of resources you can use to find a qualified manager. These tips can help you get started.
- Ask other landlords for references.
- Join your local real estate association.
- Research companies in your area.
- Check for online reviews
- Lastly, get recommendations from your local apartment association
No matter where you do your research, it’s important to hire a property manager that will result in a good long-term relationship. Before you make your final decision, hold a formal interview to learn everything you can about their business style and methods for management. Ask a variety of questions about professional qualifications, screening processes, communication methods, and relationships with qualified vendors and maintenance personnel. You should also feel comfortable asking for references from current or previous clients.
Frequently Asked Questions to Hiring a Property Manager
What’s the difference between hiring a property manager and a resident manager?
A resident manager is an employee you hire to help you manage your rental property. This means you’ll have the responsibilities of being an employer, including payroll, legal requirements, and tax requirements.
A property manager is usually a freelance professional who is self-employed or working for an established company. Since the property manager is an independent contractor, you avoid the responsibilities of being an employer and often gain added assistance from the company’s existing experience.
Is it expensive to hire a property manager?
Generally, there are two ways property managers get paid. The most common way to pay a property manager is by paying a percentage of the rent collected. This is usually around 6% to 12% of rent collected. The second payment method is a flat fee per rental unit. The flat rate method is more common for landlords with few rental units.
It’s important to note that the contract for percentage of rent payments should clarify “rent collected” instead of “rent due.” Flat fee payments are usually required whether rent is paid or not (including unoccupied units).
Can a property manager help me if I participate in affordable housing programs?
Professional property management companies are typically familiar with local and federal laws surrounding affordable housing. That means you won’t have to learn about specific laws to maintain compliance. When comparing property managers, ask questions about their experience with the program you participate in.
What are the top three questions I should ask a property manager?
There are many questions you should ask a property manager before making a final decision. Some of the most important questions include:
- Are you licensed in property management?
- How long have you been in business/How much experience do you have with properties like mine?
- What services do you provide?
How do I add my property manager to my insurance policy?
Meet with your independent insurance agent to share your plans about hiring a property manager or management company. You’ll need to list the property manager as an additional insured on your policy.
Hiring a property manager isn’t the right choice for every landlord. However, if you do choose to entrust a professional with these important responsibilities, it’s essential to ensure you have your insurance updated to reflect the changes. Talk to a professional independent insurance agent at LoPriore Insurance Agency to make sure you have all the information you need and avoid insurance coverage gaps.