When to Hire a Property Management Company vs. Employing a Property Manager
As a real estate investor, one of the most critical decisions you’ll make is how to manage your properties. You have two primary options: hiring a property management company or employing a property manager. Both options have their pros and cons, and the best choice depends on your specific circumstances, including the number of properties you own, your level of expertise in property management, and your availability to handle day-to-day tasks. This article will delve into the specifics of each option to help you make an informed decision.
Understanding Property Management Companies
A property management company is a professional organization that handles all aspects of managing rental properties on behalf of the owner. They take care of marketing the property, screening tenants, collecting rent, handling maintenance and repairs, and dealing with tenant complaints and legal issues.
When to Hire a Property Management Company
If you own multiple rental properties or rental units, a property management company can handle the increased workload that comes with managing multiple properties.
If you live far from your rental property, a property management company can handle on-site issues that you can’t address remotely.
If you’re not interested in hands-on management or have limited time, a property management company can take care of all the day-to-day tasks of property management.
If you can afford the cost, property management companies typically charge between 8-12% of the monthly rental value.
Understanding Property Managers
A property manager is an individual who manages the day-to-day operations of a rental property. They can be an independent contractor or an employee of the property owner. Their responsibilities are similar to those of a property management company, but they may have a more personal relationship with the property and tenants.
When to Employ a Property Manager
If you own a single rental property or a small number of properties, a property manager can provide the attention and care that your properties need.
If you live close to your rental property and want to be involved in some aspects of property management, a property manager can handle the tasks you prefer not to do.
If you’re on a tight budget, hiring a property manager can be more cost-effective than hiring a property management company. You can negotiate their salary or pay rate, and you won’t have to pay a percentage of your rental income.
In conclusion, the decision to hire a property management company or employ a property manager depends on your specific needs and circumstances. By considering the factors outlined in this article, you can make the best decision for your real estate investment business.
