Are you among the
10.6 million Americans earning an income from rental properties, or perhaps want to become one? As a
rental property owner, one of the most important decisions you need to make is whether you want to hire a property manager to handle the day-to-day operations of your property or handle them yourself. Nearly half (45%) of all landlords manage their properties.
What is a Property Manager?
A property manager can be an individual or an entity that oversees a rental property's administrative, maintenance, and managerial tasks. Typical property manager responsibilities include the following:
- Advertising the rental
- Screening and selecting tenants
- Collecting rent and other fees
- Handling maintenance and repair issues
- Responding to tenant complaints
- Evictions
A property manager can make your life easier, but it comes at a cost. The cost of a property manager can vary but averages between 5 and 20% of the property's monthly rental income.
Pros of a Property Manager
The following advantages are based on the assumption that you hire an experienced and competent property manager.
- Avoid Costly Lawsuits and Liabilities – An experienced property manager understands fair housing and local laws. One
property management service offers these examples. "You might deny a tenant with a service animal because you don't allow pets, and that will land you in trouble with both the Fair Housing Act and the Americans with Disabilities Act. Maybe you'll deny one tenant's application because you're looking for a higher income level, but then after your property is vacant for a month, you approve another applicant with the same income. That's discrimination."
- Better Tenants – You will lose money if your units are vacant. And if you have a high tenant turnover rate or a difficult tenant (never pays rent on time, damages your property, etc.), you're wasting a lot of time and resources. An experienced property manager will know how to screen applicants to attract better tenants, and those tenants are more likely to stay if someone can quickly respond to their needs.
- Increased Efficiency and Savings – An experienced property manager knows the ins and outs of managing a property and its tenants. They've dealt with tenant disputes, evictions, and more. And they will have streamlined systems and a network of reliable and efficient vendors to work with. Some would argue that the experience and knowledge of a property manager can maximize your profits.
- Saves You Time – If you decide to manage your rental property on your own, you are on call 24/7. You will spend time finding and screening tenants, maintaining the property, collecting rent, and dealing with tenant issues. A property manager will typically handle all of that, thereby saving you time.
- Ability to Invest in More Properties
– You can't be in two places at once, so if you manage your own property, you may not have the time or resources to manage another property.
- Peace of Mind – If you hire an experienced and reliable property manager you trust, you can hand over most of the responsibilities while enjoying the benefits of owning a rental property without all the stress and headaches.
Cons of a Property Manager
- Lower Bottom Line – Property managers cost money and will bite into your profits. In addition to the monthly fee, you may also have to pay leasing, renewal maintenance, or other miscellaneous fees.
- Lack of Involvement
– Typically, property owners are more invested (financially, emotionally, etc.) in a property than a property manager. Furthermore, some property owners prefer being hands-on. They want to make the decisions and keep a close eye on their property and their tenants, which may make it difficult to hand the reins over to a property manager.
Should You Hire a Property Manager?
It may look as if the pros/cons list is unbalanced, with significantly more pros than cons, but the cost of a property manager may be enough reason not to hire a property manager. Only you can decide if a property manager is right for you, but in addition to weighing the pros and cons, you may also want to ask yourself the following questions:
- Do you live close to your rental property?
- Do you have more than one rental property?
- Do you have the time to deal with the day-to-day operations of a rental property?
- Do you want to be hands-on?
- Can you afford the cost of a property manager?
- Is your property part of an affordable housing program, which can complicate the rental process?
- Are you familiar with or willing to learn landlord-tenant laws and regulations?
Ready to Buy or Sell an Investment Property?
Contact Pete Heim at
610-745-3378 or
610-898-1441 or
connect with him online. Whether buying or selling a commercial or residential investment property, Pete and his team will treat you with the professional and courteous service you deserve!
