Should you Hire a Property Manager for Your Rental Property?
After you purchase your first cashflow rental property, you will likely ask yourself if you should hire a property manager or be a DIY Landlord.
Hi I’m Becca, and I make managing rental properties simple and landlord life fun.
Managing your rental yourself requires a good understanding of local laws, lots of research, and having a system that keeps you on track. Here at The Rental Property Mama, we help you do just that!
However, not everyone is cut out to manage their own rentals. I make a living in my day job, helping great owners who are not able or don’t have the desire to deal with the day to day operations of management.
So how do you know which path is right for you? Should you be a DIY Landlord or hire a great property manager?
Let’s look at some scenarios where you should NOT hire a property manager:
1) You want to do your own maintenance and repairs you should not hire a property manager.
Two critical jobs that PM’s have are to be a buffer between the landlord and the tenant and to coordinate repairs. If you want to DIY some repairs, the PM will need to check with you on all issues, and I don’t know any quality managers who will be willing to do that. Also, if you are doing repairs, you will have to interact with the tenant and destroy that buffer the PM had given you.
2) You want to be involved in tenant selection.
PM’s have to follow strict fair housing laws, http://rebeccap5.sg-host.com/landlords-does-fair-housing-apply-to-you/, and are bound by federal laws restricting them from sharing the screening report with the owner. Good property managers understand this and know that discussing potential tenants with owners will open them wide up to a fair housing lawsuit. If you find a property manager who will let you select the tenant, trust me they are not worth any amount you are paying them…
3) Do you have specific vendors you want to be used for different services in your home?
Then you probably should NOT hire a property manager. PM’s are not legally able to pay a vendor who has not provided them their proper license and insurance. Because of this, they often work with in-house service providers or have a list of approved vendors who have provided the required information. If every owner had a list of which specific vendors to use, it would be nearly impossible to keep that straight. PM’s can’t run a reliable business that way, and I don’t know a single good one who accepts an owner who requires specific vendors (besides the pool and lawn guy).
When would hiring a Property Manager be a GOOD IDEA:
1) If you have a kind heart and trouble saying “no,” then hiring a PM may be a good idea.
Some people hire a PM to the “bad guy” if they know they would have a hard time enforcing the lease.
2) The time required to show available rentals and coordinate repairs may be more than you are willing to give up.
Time value is especially true if you are a high-income earner. You may have to ask yourself if it makes sense to spend an hour calling around to get estimates on a plumbing repair if you earn a higher than average pay.
3) Distance from your rental property may be a significant deciding factor if you should hire a PM.
It is very hard to be a DIY Landlord if the property is more than an hour away or even in another state. For example, my husband and I almost purchased homes in Alabama (we live in Florida). Even though I am a full-time professional property manager, I would have hired a local PM. Is it possible to manage at a distance? Sure! It is just a whole lot harder.
A poorly managed property could cost you tens of thousands of dollars in additional repairs, vacancy, and deferred maintenance. Regardless of whether you hire a property manager or DIY landlord, you will need to closely watch these details. Click here to learn if your property manager is a hero or a zero!