If you’re looking to purchase an investment property, one thing to consider is whether or not to hire a property management firm. Some investors shudder at the thought of spending money to retain a company to handle the day-to-day operations of running a residential property.
A typical property management arrangement might call for anywhere from 8% to 12% of the monthly rental value of your investment property. But there are other possible expenses related to, among other things, maintenance and repairs. Reputable service providers will be open and transparent about the fee structure, so you won’t get any surprises.
But it’s worth asking the question: Is it worth hiring a property manager? After all, can’t you do it yourself? Perhaps you’re used to wearing multiple hats and being a jack or jill of all trades. While it might seem like a good idea to own and control your investment property without a third-party helping you, you might lose more than you save by going that route.
Keep reading to see why taking a pass on a property manager can cost you big time.
When hiring a property manager, you need to have a long-term perspective. Some property investors focus solely on how much money they’ll pay each month. But a reputable property management firm will save you money and help you make money. It will help you find quality tenants to maximize your monthly stream of passive income. The service provider will also be positioned to suggest how much you should charge for rent. So, you won’t price rent too low–thereby jeopardizing your returns–or too high–thereby frightening off quality tenants.
As a property investor, you’ll want responsible tenants who pay their rent on time and don’t cause trouble. But the process of screening prospective tenants needs to be done correctly. Can you do so on your own without violating any state or federal regulations? Do you know what questions to ask or what documents to request? Doing things the wrong way can lead to issues.
If you make any missteps during the screening process, you might open yourself up to accusations of discrimination. Avoid that nightmare scenario at all costs. A property manager will understand applicable state laws and federal laws, and will screen applicants. This will safeguard you from legal troubles that could tarnish your good name and drain your wallet.
If you decide to manage your investment property independently, are you confident you can find the right vendors and get the best prices for the products you require? That’s one area where property managers excel. They have contacts with quality suppliers, contractors, and tradespersons. Leveraging a property manager’s expertise means you could wind up saving a lot on products and services. You could wind up wasting a lot of time and money if you don’t know who to call and where to go for the most reasonable costs.
You’ve no doubt heard the saying that time is money. Sure, you could own and manage your investment property. But that means you’ll have to shoulder responsibility for everything. You’ll also have to find tenants, collect rent, schedule maintenance and repairs, advertise available units, and handle tenant complaints and inquiries. Do you fancy a tenant calling you in the middle of the night to report a problem that can’t wait until daylight hours to handle?
When you hire a reputable property manager, you can outsource as many of the day-to-day responsibilities of managing your investment property as you want. That means you’ll have more time. What could you do with that time? You could focus on adding to your investment property portfolio, spend quality time with family, do some traveling, and enjoy other things.
It’s a good idea to keep things strictly professional when it comes to dealing with tenants. You’ll want there to be mutual respect, of course, but it’s never a great idea to get too close to tenants. That’s where a property manager comes into the picture. The service provider will be the go-to resource for tenants when they need to speak to someone about issues they’re having.
This arrangement will be especially useful if any of your units are rented by family or friends. You can avoid potential conflicts of interest by hiring a property manager to handle tenant relations.
Are you the sort of person who stays up a night worrying about your investments? If so, you should consider hiring a property manager to handle the day-to-day operations. What’s your peace of mind worth? If you find that you’re too preoccupied, outsourcing property management will be to your benefit. You’ll know that a property manager is taking care of your investment property around the clock. So, whether at home or on the road, you won’t have to worry about your investment. The monthly fee is a small price to pay if the end result is peace of mind.
Do you see the point? While you can steer clear of a property manager and avoid paying out money each month for its services, going this route could cost you monetarily and in other ways. At the end of the day, you’ll need to figure out whether or not you want to hire a property management firm. But the benefits you’ll receive will make the investment worth your while.
If you need a property manager for your Austin or Houston investment property, our property management team can provide the superior service you expect. At Green Residential, we believe in offering all the services that investment property owners need.
Whether you want help with advertising your property, screening tenants, collecting rent, conducting maintenance, performing repairs, or other things, let us know how we can be of service to you.
Do you have any questions or want to ask about our property management services? Get in touch for a no-obligation consultation about your property management needs.
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