Why Should You Use a Property Management Company?

Owning income properties continuously proves to be very profitable, but also very challenging. Many landlords make the choice of managing properties on their own, but often times they may find themselves needing a little bit of extra help.

If you are thinking about hiring a property manager, you need to figure out what kind of business approach works best for you. This guide’s information will aid you in making that decision. The topics outline the reasons to hire a property manager and the reasons not to.

Where Do You Live?

One of the main reasons for hiring a property management company is the distance from your investment property to your home. If your property is located in another state or faraway city, it will be increasingly difficult to carry out your landlord duties. Your commute to the property should be no more than 45 minutes. Anything longer than that and you are going to need extra help — whether it is from a property manager or not.

Even if you have a private jet, hopping on a plane every time you get a maintenance call does not seem very ideal. It’s challenging to find tenants when you’re advertising your property from afar. You may also end up finding tenants who aren’t who they seem to be, making everything more difficult for you. It’s impossible to know what is going on at all times, regardless of how close you may live to your property. Although, a larger distance makes it much easier for you to overlook crucial details and allow things to get out of hand. Not keeping a close watch on the conditions of your business can be a recipe for disaster.

+ How A Property Manager Can Help

If you’re far from your rental unit, it just isn’t feasible to make regular visits. The cost of making these visits, especially when issues arise, will eventually add up. This will take up your valuable time and put holes in your wallet. It’ll all only hurt your business in the end and add unneeded stress to your life. But, that’s where a property management comes in. They’ll be able to tie up all those loose ends, actually helping you save money rather than waste it.

Having someone close to your property and at your disposal will make managing your business a breeze. You won’t have to worry about being in the dark about the status of your property with a property manager. Someone in the area will always be tending to tenants’ needs and requests while simultaneously keeping you informed.

You Shouldn’t Hire One If…

…you live close by and could handle requests in a timely fashion. Hiring a property manager can sometimes add more challenges. If you can handle the distance, don’t bother hiring a property manager. It’ll be a waste of money in the end.

How Many Properties Do You Own?

If you own multiple properties, you most probably struggle from time to time with juggling all of your tasks. Dealing with multiple tenants can become extremely stressful. That’s especially true when they’re all contacting you at random hours of the day. With all that work, you’ll probably start wishing you could clone yourself. Keep up with all of the requests, complaints, and payments can be exhausting.

+ How A Property Manager Can Help

A property management company would organize every aspect of your business. They’ll take care of the variables for you. In turn, it will avoid any confusion that might come from handling so many properties at once. Doing it all by yourself is not easy, especially if being a landlord isn’t your day job. They’d coordinate what needs to be done in a timely fashion and organize paperwork.

You Shouldn’t Hire One If…

…you are a full-time landlord with no other commitments. You should be able to keep track of everything without a problem. Once it gets to a number over 10 or even 5, it will be much more difficult to manage everything on your own. At this point, you would need to hire a property manager or find an alternate solution.

How Much Time Do You Have?

As mentioned before, if you have another profession, you’re probably not able to devote yourself to your properties. The success of your business can be compromised because of this, but a property management company will be completely committed. If you’re new to the business, you may not be aware of how time-consuming property management can be. If you are busy with other things, like your social or family life, then you may need some extra help. However, if your property is low-maintenance and you have quiet, laid-back tenants, there shouldn’t be much of a problem.

+ How A Property Manager Can Help

So, if you’re very family-oriented or a social butterfly, you may feel a bit deprived of time. A property manager will tend to your property around-the-clock. Without adequate attention to detail, it is nearly impossible to maintain proper occupancy rates and enforce your lease. When you’re juggling so many things at once — from a family to a social life, to work, school, etc. — it can become very overwhelming and tiring. Because of this, it’s easy to let important pieces of information slip your mind. And that is just a recipe for disaster.

Hiring a property management company will ease the process, allowing you to dedicate yourself to other facets of your life while still being sure your units are being carefully maintained. What is your time worth? Property management is the perfect barometer to help you answer this question.

You Shouldn’t Hire One If…

…you’re flexible and good at multitasking. It all depends on your level of productivity and devotion to the property. If you don’t have an overwhelming number of properties, another full-time job, pressing family engagements, or simply a bubbling social life, there’s no need for the extra expense. That is, if you focus most of your energy on the success of your rental unit(s), then you don’t have anything to worry about. If it’s worth your time to do everything involved in property management for the net positive rent at the end of the day, week, or month, then you should be able to self-manage. However, if it isn’t, you will need a good property management company to perform these tasks for you.

How Much Experience Do You Have?

If you’ve developed a desire to invest in real estate, but have no prior knowledge of how it all works, then hiring a property manager may be a good idea. You’re going to run into a number of obstacles that could prove difficult to overcome. Going into the business blindly will become very expensive, as learning from your mistakes will also mean having to fix them. There are many rules, laws, and regulations you need to be aware of and a certain set of skills you need to traverse the world of investment properties.

+ How A Property Manager Can Help

A good property manager will help you understand all of the necessary precautions, like filling vacancies, finding repairmen, handling complaints, enforcing rules, and so on. They will already have credible connections for services likely maintenance repair, saving you the hassle of a bad experience with an inept handyman.

It is also very easy for an inexperienced landlord to run into legal trouble. Having little to no knowledge of the Fair Housing Laws and Landlord-Tenant Law can be easily accused of discrimination or negligence. Failing to fix the A/C in the middle of the summer can really make people heated.

You Shouldn’t Hire One If…

…you’ve done your research and read up on your state’s laws. If you have a good handle on the rules and regulations surrounding property management, it’s not worth hiring a property manager. This could destroy your investment and completely mess up a dynamic that is already working for you.

What’s Your Budget?

Hiring a property management company comes as a luxury. You have to spend money to make money, but if you cannot afford a property management company, then it may not be all that helpful. Assess your finances and schedule a consultation to see what would be best for you. If you have trouble with budgeting or keeping track of payments, then a property manager could aid you tremendously. You should refer to this guide on typical property management fees to see if it would fit your budget.

+ How A Property Manager Can Help

In the long run, property management can save you time and money by taking care of problems you may be too far or too busy to work on. Property management companies have an arsenal of handymen they’ve used in the past. They can send out the right person for the job at hand and save you from paying the cost of sloppy or slow work. There are countless variables that can turn into problems at any moment.

Property management companies have experience with most issues and are prepared to handle problems as they arise. However, managing your property yourself could potentially save you a lot of money, if you know what you’re doing and have the time to dedicate to it. It’s important to weigh in on what makes the most sense for you.

You Shouldn’t Hire One If…

…you’re doing well on your own, you’re handy and have good connections, you’re not making much profit or breaking even on your investment. There’s no need to waste money on a property manager if you are already handling your property in an efficient manner. As the saying goes, if it ain’t broke, don’t fix it. Also, if you’re not making much profit from your units or you’re managing a small number, then it is probably feasible to handle things on your own.

Whether you manage your property yourself or hire a property manager, you are still going to have a great responsibility on your hands. It could make or break your investment, so proper due diligence should be taken — especially before you put a dent in your savings account.

Are You A People-Person?

From tenants to contractors, there is a wide variety of people you are going to be dealing with. For this reason, having communication skills is key. It’s important to establish a good tenant-landlord relationship to avoid any tension or issues in the future. Not only that, but communication is also important for finding tenants in the first place.

Developing a thorough leasing agreement, setting rules, checking in regularly, making sure rent is paid, addressing any problems, and encouraging tenants to keep you informed are all part of being a landlord. If you’re reserved or dislike confrontation, you may want to hire a property management company. Even if you’re just not that social and you’re managing everything on your own, you may have trouble handling certain situations.

+ How A Property Manager Can Help

They can deal with difficult tenants and solve conflicts as they arise, so you don’t have to. Confrontation in the event of late payments or other issues will be required and if you are uncomfortable with these kinds of situations, even more problems will surface. A property manager is aware of all the laws surrounding tenant-landlord relationships. Not only that, but they know how to sustain a professional demeanor under significant stress. A lot of landlords also tend to not be actively hands-on with their property.

Most landlords actually get out of the rental business because of having to deal with tenants. It’s hard to tolerate it all for an extended period of time. Even if your tenant is not problematic, there is a chance that they are pesky or needy. Some tenants contact their landlords nonstop and put in multiple maintenance requests.

It’s important to think about how many people would be in the unit, as you may have to be dealing with more people than there should be in the unit. This can cause issues like noise complaints or more damage to the property.

Property managers will most definitely lift a great weight off your shoulders, providing you with relief from the exhausting process. You really won’t have to interact with your tenants at all. With a good property management company, you’ll probably be able to sit back and relax while the rent payments roll in. This is especially helpful if you have a low tolerance for dealing with tenants. Property managers will go about every instance in a professional manner, keeping proper laws in mind at all times.

You Shouldn’t Hire One If…

…you’re an outgoing individual who enjoys communicating with others and has no trouble dealing with confrontation. When you are able to keep a professional demeanor at all times and navigate situations with ease and finesse, there is no need for someone else.

If you are assertive and able to nip issues in the bud, then you shouldn’t have a problem, as long as you remain calm and never lose that professional exterior. Remember that your phone may be going off at all hours of the day if you choose to do it all on your own, though. If you’re prepared for that amount of responsibility and devotion, go for it.

Can You Give Up Control?

Property managers have the liberty of making many important decisions on your behalf. For this reason, it means they can also make some very costly mistakes that will affect you greatly. It is completely understandable to be wary of turning over all of your control to someone else — even if they do have the experience and a certification. You need to ask yourself whether or not you are comfortable with letting someone else take charge.

+ How A Property Manager Can Help

If you do enough research, the property management company you use will have a lot of experience in real estate. They’ll be able to keep track of every little detail, including ensuring that all procedures are done in an organized, legal fashion. This will avoid tricky situations in the future, like in the case of an uncooperative tenant. It’s also important that, if you do consider hiring a property management company, you choose one that will be open with you and inform you of everything that goes on. They should also be flexible, so you don’t have to be tied down to a very specific set of services you can’t alter.

They should be the eyes and ears of your business, after all. The only other option for you, if you are in need of help, would be to hire employees. This would subject you to a whole other process in which you are an employer. That means, managing workers, handling payroll, and having to deal with other legal requirements and considerations. Hiring a property manager would avoid this hassle and still provide you with the assistance you need.

You Shouldn’t Hire One If…

…you’re worried about getting out of the driver’s seat and giving the wheel to someone else. As the landlord of the property, you would be liable for everything that pertains to it. Your property manager may make mistakes and cost you extra money, negatively impacting your business. Tenants may not be comfortable with any new protocols that the property manager implements. It will take some time for them to get accustomed to the changes, so you need to worry about that as well. Think about the companies’ management styles.

Are You Looking For Something Specific?

It’s important to identify where your current property management methods are lacking. You may just need a better way of collecting rent or perhaps you need help attracting prospective tenants. When you search for a property management company, you should do an in-depth background check. Look for reviews online and read about others’ experiences. Make sure they offer the kind of services you are looking for as well.

+ How A Property Manager Can Help

Finding a property management company that can tailor to your needs, in this case, is very important. A handful of companies offers a method of choosing the specific features or amenities you need. However, lots of property managers provide preset bundles, meaning you could end up paying services you do not even use. So, if you find one that checks all of your boxes, and only those boxes, there’s no need to look elsewhere. Do not forget to thoroughly look into the property manager or the company they work for. A quick Google search can tell you a whole lot.

You Shouldn’t Hire One If…

…you’re looking for an isolated function, like bookkeeping or marketing. There are other more inexpensive solutions to issues like these. For instance, if you need help getting a little more organized, you may benefit from property management software. You can read more about that here. Or, if you need an easier, more efficient way to collect rent, it’d probably be better to find an online rent payment system. If you need to keep track of payments and get things in order for taxes, you could use a service like QuickBooks. To sum it up, if you find that you are in need of assistance, you should review your options. You may not need the amount of help they are providing. Pick what suits your needs. You should not have to pay for something that is not useful to you.

The Bottom Line

When it comes down to it, you need to identify your priorities. If your investment properties aren’t high enough on that list, then maybe it’s not a good idea to handle them on your own. You don’t want to create problems for yourself when you don’t have to. There are solutions out there — and if you find yourself continually struggling to keep up with your rentals, a property management company is probably your solution. However, you shouldn’t be spending your money on a property manager if you’re well-prepared and self-sufficient. Knowing what you need for your unique business is essential to its prosperity. Consider all of the factors above before making your next move.