If you want to spend less time managing your rental property and still collect a decent profit, one of your best options is to hire a property manager. When you hire a property manager, you’ll be delegating authority and various management responsibilities to a third party; your manager will be responsible for things like marketing the vacant property, screening tenants, handling maintenance requests, collecting rent, and even handling evictions if they come up. In exchange, you’ll be responsible for paying them a fee each month (usually as a percentage of a gross monthly rent).
So what are the benefits of this arrangement? And should every landlord consider it as an option?
The Benefits of Hiring a Property Manager
These are some of the most important benefits of working with a property manager:
- Less vacancy time. Any property investor knows that excessive vacancies can kill your profitability. Each month your property remains unoccupied is a month where you’ll be responsible for upkeep costs with no money coming in. But with a property manager, you can rest assured that your property will be filled with a tenant as quickly as possible – and many property managers only charge money while the property is occupied, reducing your financial burden even further.
- Better tenant screening. One of the secrets to a successful rental property is finding the right tenants. A good tenant will pay rent on time, keep the property in good condition, get along with neighbors, and stay for a relatively long period of time. The only way to secure this is to thoroughly screen your tenants before accepting them. Because your property manager will handle this, you don’t have to worry about it – and you can rest assured that your property will only have the best candidates living in it.
- Hands-free repairs and maintenance. Inevitably, even the best-cared-for-home is going to run into some issues. Whenever an appliance breaks or the home deteriorates, your property manager will be on call to make repairs and conduct maintenance. You won’t have to get your hands dirty or manage a surprise project in the middle of your already busy life; you can remain totally hands-off as someone else handles it for you.
- Emergency contact and management. As a landlord, you’ll basically be on call 100 percent of the time. If there’s an emergency at the property, such as a roof leak or a frozen pipe, your tenants will be calling you – unless you have a property manager working for you. It’s invaluable to have someone else answer the phone during this high-stress, demanding situation.
- Seamless rent collection. Rent is your source of income – the stream that makes your property profitable. When tenants don’t pay rent on time, or when they don’t pay in full, it results in a financial disruption (and a high-stress situation for you). Your property manager will ensure rent collection is smooth and consistent. They’ll also follow up with tenants who don’t pay.
- Streamlined eviction processes. Your tenant screening process with a property manager should ensure that you don’t have to deal with many evictions – if you deal with any at all. If your tenant refuses to pay rent, or if they’re especially destructive, an eviction may be your only available option. Evictions can be tough to manage on your own, which is why it pays to have a property manager on your side handling it on your behalf.
- Advice and recommendations. In many cases, your property manager will be willing to give you advice and recommendations about all your real estate investment moves. They can recommend specific renovations, connect you to other authorities, and help you choose new properties to add to your portfolio.
- Reduced stress. Thanks to all these services and advantages, you’ll have lower stress when managing your property, allowing you to remain in better health while still making a profit.
Are There Downsides?
So are there any downsides?
As with most decisions, there are some negatives to weigh with this option as well. For starters, your profitability may be decreased slightly. You’ll owe a set percentage of your gross rent to your property manager, reducing your net proceeds. However, considering the time you’ll save with this arrangement, it may easily be worth it.
You’ll also have to be more “hands-off” with your property. You may have less transparency and less control over certain situations. But if you’re interested in distancing yourself from the management side of things, this is actually a benefit.
Hiring a property manager isn’t the right move for every landlord or every property, but it does confer some impressive advantages to the people who stand to benefit most from it. Review property management companies in your area to see if they can address your needs suitably.