Hiring a property management company can be great for you, or not. One of the biggest decisions you'll make as a property owner and as a landlord is whether you should hire a property management company or not. Many owners manage properties on their own or with the help of an employee. But sometimes owners need more help, and that's when a property management company might make sense.
Property management companies can be a huge asset to you, as they can save you time, frustration and at times prevent financial losses, but there is a cost involved. But there are many valid reasons why you might not want or need one.
If you are thinking of hiring one, review the guidelines discussed below to determine if hiring a property management company is the right move for you.
Many owners look forward to the challenge of finding good tenants and the rewards of maintaining a safe and attractive property on their own. But if you view rental property ownership strictly as an investment and want little or nothing to do with the day-to-day management of your properties, consider hiring help to manage your property.
Your time is limited. Even if you enjoy hands-on management, you may not have much time to devote to your business, especially if being a landlord is not your day job, or if you prefer to spend your time growing your business, including searching for new properties, arranging financing for renovations, or changing your business structure, then a management company may be a good way to spend your money, if you can afford the cost.
Hiring a property management company is an attractive option if you can afford the fees.
When interviewing companies, expect to hear quotes ranging between 10% and 15% of what you collect in rent revenue. If it's a down market and you're able to manage things yourself, you may want to keep doing so until the market turns around.
You're suddenly inundated with management tasks. If you own more than one property and your property business is growing, at some point you may find that you need a substantial amount of help to manage everything properly. At that point, it might make sense to hire a management company.
You don't want to be an employer. If you just hire a person off the street to help with your property, you become an employer.
You'll have to handle payroll and deal with a host of other legal requirements and considerations. But, because a property management company isn't your employee (it's an independent contractor), and neither are the people who work for them, using a property management company means that you avoid the hassles of being an employer.
Now all you have to do if you want to reduce your property management hassles is to find a good and reputable property management company.