Whether you're a reluctant landlord --- renting out a property that you can't or don't want to sell in this market --- or an investor considering adding rental properties to your portfolio for the first time, you're likely considering whether you want to try and manage your rentals yourself, or whether you should hire a professional property manager. Here are a few factors to consider:
Distance
The first thing to consider is how close the rental property is to your own residence. If it's right around the corner, you'll have an easy time keeping an eye on the place, and you'll stand a better chance of being able to handle any needed repairs or emergency situations in a timely manner. On the other hand, if you live more than a 30-minute drive away, you're likely setting yourself up for a lot of scheduling difficulties if you try to manage the property on your own.
Time
Once you've rented your house to a responsible tenant, managing a rental property is not the kind of job that will require regular long hours. However, certain phases of the rental cycle will require quite a bit of your time. Getting a house ready to rent, marketing and showing the property, screening tenants, and getting all the proper paperwork in order can be time-consuming. Once you've placed a tenant, you'll need to be on-call in case repairs are needed. You'll need to ensure that rent is paid on time each month and keep accurate records of income and expenses for tax purposes. If you end up with problem tenant, chances are that many hours will be spent resolving the issues he or she presents you with.
Expertise
Professional property managers manage rentals systematically, using best practices that they've honed in the course of managing hundreds, if not thousands, of properties over the course of their careers. They have the market expertise to get top dollar for any given rental, and they know how to market properties to quickly find good tenants. They know how to structure leases to protect the property owner, how to work within Fair Housing laws, and how evictions need to be carried out. They have teams in place who can quickly respond to any issues that arise, including relationships with a variety of local service providers. If you're planning to manage rentals yourself for any length of time, these are all capabilities you'll need to be prepared to develop.
Finances
Property managers typically charge a one-time fee to get a property leased, then 8-12% of monthly rent for ongoing management. Many novice rental owners are reluctant to part with this kind of cash, especially if they already expect profit margins to be tight. However, it's important to consider that professional property managers can often command higher rents, reduce vacancy rates, address inexpensive problems before they become expensive ones, and provide many other cost efficiencies. When you realize that each month of vacancy costs about 8.3% of your total rental profits for a given year, it's easy to see how a professional property manager can easily earn his or her fee and then some---all while freeing you to pursue other revenue-generating activities.
In short, while it's easy to become the owner of a rental property, it's not always easy to manage one. If you want to enjoy the benefits of owning a rental without the time-consuming responsibilities that come with operating it, professional property management may be right for you.
Visit AllPropertyManagement.com to learn more about property management, then find a property manager in your area.
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