Property is a strong investment opportunity. The average price of homes sold goes up almost every year. Becoming a landlord by renting out homes or office space lets you exploit that reality while leveraging a minimal amount of capital. You can take out a loan to buy your investment properties, then lease them out — covering your overhead and pocketing a small profit. Once the loan is paid off, most of that rent is profit.
It all seems straightforward enough, but what about when you have two properties or 10? At some point, hiring someone to manage your rental properties just makes sense.
What Is a Property Manager?
Property managers tend to collect the rent on your behalf, but that is the least of what these real estate professionals do. In addition to collecting rent — they manage it. This involves establishing how much rent you should charge and adjusting that amount as appropriate each year. They also assess late fees, processing fees or management fees.
Property managers can also find and screen tenants, fill vacancies and set lease terms. They answer complaints, address emergencies, manage evictions and oversee move-outs in addition to maintaining the property and handling necessary repairs or upgrades (including helping you decide which renovations are smart).
Why Hire a Property Manager?
The benefits of hiring professional rental property management extend far beyond dealing with tenants and leases. They are real estate professionals and have knowledge of tenant law that is difficult to find anywhere else. State and national laws change all the time, and they know how to navigate these complexities.
Property managers can also help you manage other people who are involved with your house, apartment or building, such as security personnel, cleaning services and repair. They can find staff, screen them and oversee their work. Finally, property managers help you with finances. They maintain an operating budget for the property, keep the important records (e.g., inspections, leases, repairs), and pay the property taxes. Having a property manager on your team just makes sense when you are investing in multi-family properties or own multiple properties.
Is a Professional Property Manager Worth It?
Ultimately, the question of whether you should hire a property manager comes down to your own cost-benefit analysis. A property manager will cost you. They may assess setup fees, maintenance fees, management fees and more. Some of these are flat rates while others are percentage based, and the fees can vary considerably between property management companies.
You’ll have to do the math and examine the benefit a property manager provides vs. how much one charges; but in general, a property manager can only help you grow your investment portfolio. Don't let immediate costs keep you from scaling your business — after all, you can only manage so many properties yourself.
How Can a Property Manager Help You?
Property managers can help you grow your business by taking care of the legwork involved with owning and renting multiple properties. Even if you're capable of managing everything yourself, it would take hours and expertise that you may not have available. Hiring a property manager frees up those valuable resources so you can handle more investments and grow your business.