11 Signs You Need a Property Management Company
By considering the following questions, you should be able to better understand whether you would benefit by hiring a third-party property management company to help run your operations, as opposed to maintaining the property yourself or hiring a resident manager. Consider the following:
Do you live near your rental property or properties? Depending on where your personal residence is in relation to your rental unit(s), you may either be forced to or would be much better off hiring a company that’s closer to your properties. You should take into consideration your commute between your personal property and the rental unit and how much this would cost you in time and actual costs.
Do you have a single rental unit or many? Of course, the more rental units you own the more time you will need to allocate to maintaining and travelling between them. The more rental properties you own, the more you have to benefit from hiring a property management group that can service all of them, or at least the ones located further away from you.
How busy is your current schedule? Do you have time to tend to the property? What do you charge in your day job? Is it worth spending your own time on maintenance and administrative tasks? Does it make sense for you to be allocating your time to your investment properties? If you can spend your time being paid a higher amount than the returns offered by your efforts on an investment property, then it is likely a good idea to hire someone to do this for you.
Are you able to afford these property management services? Of course, cost comes into play. You should always consider whether you can actually afford these services. Better yet, if your rental income on the unit can cover these ongoing expenses then at least you won’t have to dip into your own pockets to cover these additional costs.
Are you looking for active or passive management? You must be ready to tackle the responsibilities of a landlord, including evictions and other responsibilities. Property management companies often provide a complete package, from finding and screening tenants, to pursuing any necessary evictions. Depending on how involved you want to be with the property, hiring a property management company could save you a lot of time and headaches.
Would it make more sense to hire a resident manager or outsource to an independent contracting property management company? If you decide to hire a resident manager, then you will officially become an employer and will be tied to the additional work that comes with it. On the other hand, your property management fees are simply an expense with little paperwork beyond the initial contract. The latter will likely be more expensive so you should take that into account.
Are you part of an affordable housing program? These government-assisted programs have been known to hold property owners to very high standards. Since this is government regulated, it can be beneficial to let the experts handle your property maintenance to reduce any potential headaches. Of course, since these are government assisted, you can include the cost of property maintenance into your budget when applying for grants.
Can you balance your current task load or are things starting to pile up? An immediate sign that help is needed is if you find that your list of errands is starting to grow uncontrollably. This assumes that you’ve been busy spending your time on other tasks that need to be done, not just sitting around.
Consider your past experience as a landlord. If you’re new to the whole landlord business, then it may make sense to let an experienced individual handle the reins.
Are you comfortable allocating control to a third party? It goes without saying that you must be very comfortable releasing control of your operation since property management companies typically provide the full-service bundle. This makes the most sense for those seeking a passive investment.
What is the state of your current operations? Given that property management companies are skilled at what they do (or at least should be), they can help to improve your current business operations––from improving tenancy rates, to rental prices, and more.
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