1. How far do you live from your rental property?
If you live close to your rental property, you may be able to make the regular check-ins necessary for upkeep, maintenance, collections, and more. The further away you live from your rental property, the harder and more expensive it is to visit and maintain the property on a regular basis. Regular visits to the property are crucial for its success, and there is always potential for a last-minute emergency. Are regular visits and on-call duties feasible for you?..
2. How many properties or units do you own?
As the number of properties or units you own goes up, so do your responsibilities. More units equals more tenants, more complaints, more routine maintenance needs, more emergencies, more vacancies, and the list goes on. Property investors with large portfolios are much more likely to reap significant benefits by hiring an efficient property management team.
3. How much experience do you have managing property?
Investing in property and managing property are two completely different skillsets. If you want to invest in rental property but have no experience as a landlord, hiring an experienced property management company may be the right choice. Trying to manage your property with no experience will likely lead to many avoidable, expensive mistakes. From completing repairs to filling vacancies, experience goes a long way in securing your property’s success.
4. How much experience do you have with maintenance and repairs?
When it comes to experience managing rental property, knowing how to manage routine maintenance and repairs is crucial. Are you handy? Do you have experience unclogging pipes, fixing washing machines, and troubleshooting A/C units? If you cannot do it yourself, make sure you know who to call. If you are at a loss either way, a good property management team will be equipped with the knowledge and resources needed to hire reliable handymen and contractors for all your property maintenance needs.
5. How much time can you dedicate to managing your property?
Are you able to make your property management duties a full-time job, or are they simply a side gig? Managing rental property can quickly become overwhelming, even for those with experience. If you already have a full-time job and managing your investment property can only be done in your free time, consider hiring a property manager. Effectively managing a property requires constant attention. Time is one of life’s greatest resources, and make sure you have plenty to spare before managing a rental property alone.
6. How quickly are you able to fill your properties or units?
If you question whether or not you have time to advertise your property, field calls, and show units – consider leaning on the expertise of a property management company. Property managers are equipped with the time, expertise, and communication channels necessary to market your property and lower your vacancy rate. Marketing efforts and fielding interest can be a time-consuming commitment, but that time is nothing compared to the cost of high vacancy rates. Pay attention to your vacancy rate and your ability to fill units quickly (and keep them filled!).
7. Are you interested in building relationships – even when they get tough?
The success of a property in the eyes of tenants and the community many times comes down to how well tenants and landlords are able to communicate. In the era of technology, every rental property in town likely has online reviews that are available to the public. Are you willing and able to create and maintain relationships with your current and future tenants? Keep in mind that conversations and communication will sometimes be tough. Evictions, complaints, late payment notices, and damage to property are only a few of the tough conversations you may need to have with tenants. If the thought of maintaining these relationships seems stressful, property managers are skilled in handling landlord-tenant relationships and conflict. They not only understand landlord-tenant law but also serve as a buffer with strong communication experience.
8. Can you afford to hire a Property Manager?
After answering the previous 7 questions, you may be leaning one way or another when it comes to managing your property or hiring a property management team. Before hiring a property manager, you need to assess your finances and the opportunity cost of where you choose to spend your time. Property managers are not free, and they typically charge a fee of up to 10% of the property’s monthly gross income (depending on the number of units). This percentage could absolutely be worth your time, travel, and stress – but make sure you do your homework when it comes to your finances and the fee structures of local property management companies before diving headfirst.
The decision to hire a property management team or go it alone ultimately depends on your lifestyle and financial status. Take a long look at your time, experience, and available skill-set so you can make an educated decision in the best interest of your lifestyle and property. In the guide’s next article, we will discuss the pros and cons of working with a property management company.