Last Updated October 27, 2021
You may be asking yourself “should I hire a property manager or not?” I’m a big supporter of getting a property manager, but sometimes hiring a property manager isn’t for everyone. Find out 11 reasons why I don’t think you should hire one.
What Is A Property Manager
A property manager is a company or someone who manages the day-to-day details of running a rental property. Property owners would typically hire a property manager if you are unwilling or unable to manage your property yourself.
What Do Property Managers Do?
Property managers have several responsibilities, but they’re basically the go-to person or buffer between you and your tenants.
Their duty usually includes finding quality tenants, collecting rents, bookkeeping, maintaining your property, and taking care of emergency maintenance requests.
What Are The Benefits Of Hiring A Property Manager?
There are many benefits to hiring a good property management company. But in general, the right property manager can save landlords time and money by handling the day-to-day tasks of managing their properties. They can also help you make a profit by generating a steady cash flow and income from your rental.
Here are some of the few benefits of hiring a professional property manager:
- They market your property in order to help you find the best tenants and keep your vacancy rates down.
- You have peace of mind knowing the property manager will handle the day to day tasks of your rental properties.
- The property manager will know the laws and regulations of their town or city when it comes to rentals, and this can prevent violating fair housing laws and discrimination laws when looking at prospective tenants.
- You won’t have to worry about emergency repairs or maintenance on your property.
- You can focus on other things without worrying about the day-to-day needs of your tenants.
- They also take care of the lease agreement, legal paperwork, the eviction process, and taxes so you don’t have to worry about those.
If you want to read more about the benefits of hiring a property manager, check out my detailed article “13 Reasons To Invest In Property Management Immediately.”
How Much Do Property Managers Cost?
Having an experienced property manager is great, but they also come at a cost! The cost is a big determining factor when deciding to use property management firms or not. How much a property manager will charge varies on a few different factors.
Some factors include:
- How many rental units you have or business you can bring to them;
- The amount of demand for their services;
- Their experience; and
- The condition of your property
In general, property management companies usually charge 10% of the monthly rent. Some companies will also charge an additional “maintenance fee” which is a percentage of a maintenance call.
Also, be prepared to pay property management fees associated with finding a new tenant or renewing a lease. This fee can be anywhere from 50% to a whole month’s rent. Finally, depending on the company you go with there can be a lot of other fees, so be sure to carefully read any agreements.
When Should You Hire A Property Manager?
You should hire a property manager if you’re not capable of managing your property. For example, maybe you live far from your rental properties and routine inspections, managing tenants, tenant screening, and other aspects of property management are very inconvenient and take significant time.
Also, if you own several rental properties, hiring a good property manager to manage those could save you money and a lot of time.
Do I Need A Property Manager For My House?
Yes, if the return on investment outweighs hiring one. For example, if you’re focused on real estate investment, you will probably get a better return on your time by spending it finding more deals, instead of managing your properties.
The best property managers will deal with the tenant screening process, find you a qualified tenant, deal with rent collection, and any repair issues. This can take up an incredible amount of time that can be spent on finding other investment properties instead.
On the other hand, you probably don’t need a property manager for your house if you already have good tenants that do not require much from you, or you can already find good quality tenants on your own.
You also don’t need a property manager as a real estate investor if you’d rather handle all of your own maintenance issues yourself and don’t want to pay the fees that come with having a property manager.
For example, you can use Thumbtack that helps you find local professionals for the services you need. You can choose from all sorts of services such as home repair, house cleaning, roofers, landscaping experts, siding pros, and much more.
Should I Hire A Property Manager Or Not?
Sometimes you can handle your properties on your own, and therefore the cost of a property manager might not be worth it. If you’re a rental property owner, I don’t think you need a property manager if you:
- Have A Small Portfolio
If you have 1 or 2 properties, it might not be worth hiring a property manager. Having someone manage your property is much more beneficial for the investor with a large portfolio. If you don’t have a lot of properties, I would wait until you have more units to manage.
I personally waited until I had 6 units before I hired a property manager. So the size of your portfolio is important when deciding to use a property manager or not.
- Can’t Afford It
Another major factor to take into consideration when deciding if you should hire a property manager is the cost.
Although there are many benefits of having a property manager, I don’t recommend you hire one unless you can afford it. If your properties are not cash flowing well enough to cover the cost, you should not hire a property manager.
- Live Near Your Rental Property
If you live near your rental property, it is much easier to manage the property yourself. If you’re close to your rental, you can keep a closer eye on things and make regular visits if you have to do maintenance or inspections.
When I decided I wanted to be financially free, I rented out my 1-bedroom apartment and moved into a more affordable studio in the same neighborhood. For this particular property, I decided to manage it myself because it was only one unit, and I only lived a few blocks away.
- Have Experience
Some people like (or don’t mind) the hands-on management. Finding a reliable handyman or contractor is a big headache associated with maintaining a property. However, if you know what to do and who to call, you probably don’t need a property manager.
A great service you can use to help you with this is Thumbtack. Thumbtack is the quickest, most reliable way to book household service providers. Within a couple of minutes, you can book a pre-approved cleaner or handyman for any time you’d like.
- Have Time
If you have a lot of free time, or your current properties don’t take up that much of your time to manage, you probably don’t need a property manager.
However, if you have a full-time job and invest in real estate on the side, that may not leave you with much time to manage your rental property. So really take into consideration how much time you have to devote to your investment property.
- Are Handy
Managing your property yourself makes the most sense if you’re very handy or have a lot of experience with maintenance and repairs. One of the major costs associated with a property manager is the maintenance.
It doesn’t make sense to hire someone to fix a job you can do yourself. Also, by doing the work yourself, you are ensuring the work is done well and in a timely manner.
- Deal With Stress Well
Are you a level-headed person who is very tolerant of dealing with tenants? If so, you can probably handle all of the unpredictable problems that come with property management.
- Are Very Organized
You need to be an organized person if you’re going to manage your own properties. It’s very easy for something to happen that requires your attention. If you’re not organized, managing rental properties can become overwhelming very quickly.
A useful tool to help you track your expenses with your property and stay organized is this FREE Daily Expense Tracker Printable. You can use this printable to track your maintenance expenses or other expenses associated with your rental property for the month.
- Don’t Like Giving Up Control
Property managers are in charge of a lot. They collect your rent, hire contractors and handymen, and handle pretty much all of the bookkeeping of your property.
If you’re not willing to trust someone to make decisions on your behalf, you should not hire a management company. If you like to micromanage, giving up control will probably drive you (or your property manager) insane.
- Have An Understanding Of The Law
If you have a basic understanding of landlord-tenant laws (or a good attorney), you can choose to manage your own property. It’s important to have an understanding of the law to ensure you’re acting in accordance with the law.
You don’t want to be sued because you accidentally discriminated against someone due to ignorance of the law. You also have to be able to understand your leases, which is a binding contract between you and your tenant.
If you have an understanding of landlord-tenant law or already have an attorney handling those things for you, you don’t need a property manager.
- Rent Your Properties Quickly
If you don’t have a high vacancy rate or problems finding new tenants, you probably don’t need a property manager.
Property managers are very skilled at screening and finding qualified potential tenants. However, if you’re already renting your properties quickly and have a low vacancy rate, you don’t need someone to do that for you.
Summary
There are a lot of factors to consider when deciding if you should hire a property manager or not. If any of these factors sound like you, you may not need a property manager right now.
I’ve shown you many reasons you may not need a property manager. However, read my detailed article “13 Reasons To Invest In Property Management Immediately” to see some reasons why you SHOULD hire a property manager.
Related Articles:
- How To Become A Property Manager: 5 Important Steps You Need To Know
- 10 Tips For Buying Your First Home
- 10 Major Benefits Of Investing In Real Estate From A Pro
- Real Estate Investing Guide: 3 Simple Steps To Be Successful
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I’m lovin’ it! I actually just read like three of your posts today. So that means you better keep writing more, because I am going through these like they’re going out of style.
Thanks Matt 🙂
I think it’s great how you advised people to not work with a property manager unless they have a bigger portfolio. That way they’ll be getting all the benefits that they can from the manager without losing money. I hope that people realize that managing multiple properties is hard to do if you already have a job sp hiring a manager is usually their best option.
Hi David. Yes, I agree! Managing multiple properties is definitely hard to do (especially, if you don’t live close to your investment properties)! That’s why I think my property manager is the best investment I ever made!
I liked that you mentioned a property management company can help you if you don’t have the time to look after your properties. My mother is thinking about renting out one of her properties, and we are looking for advice to help her manage it properly. I will let him know about the benefits of hiring a property management company to help her and see if it helps her decision.
Thanks for reading Ellie
I appreciate your tip to choose a property manager that is experienced in maintenance and repairs in case something goes wrong in the property. I also like how you said that they should be working on a lease agreement that is legal. If someone was looking into property managers, I would assume that they would consider this post.
One of my uncles owns a few properties which he rents to have an extra income but since he is getting old, he is thinking about what to do. I like how you mentioned that if you are unable to administrate your properties, a property manager should be hired. I will recommend him to look for an agency that can provide him better assistance.
Hi Derek. I totally agree with you. Sometimes as we get older managing properties can get to be too much.
Thanks for explaining how a property manager needs to be level-headed in order to deal with tenants. This is great for any property rental place, especially apartment complexes. There are a ton of tenants in one place so a property manager that can handle all of their requests is needed.
Hi Franklin. I totally agree. Thanks for reading.
I like what you said about using a property manager to collect rent and hire contractors. My sister wants to rent out her her old home soon. I’ll share this information with her so that she can look into her options for property management companies that can help her with this.
Hi Patrick. Thanks for sharing!
I have been planning to hire a peorpty management service because I barely have the time to manage the apartment building that I am renting out. I’m glad you shared here the factors that affect the manager’s salary, such as experience and my property’s condition. It’s also great to learn that a property manager has a lot of connections with handyman and cleaning service, which will benefit me in the long run.
Hi Rachel. Yes, that was the best thing about hiring a property manager. I no longer needed to find a good handyman. My property manager had a list of reliable people they’re already working with.
You made a great point when you mentioned looking for someone who is organized to be your property manager. Managing some properties can be overwhelming as there are a lot of things to take care of. I would like to think if someone who owns a lot of properties to hire a property management service that is organized and reliable.
Thanks for reading Taylor!
You are absolutely correct and thanks for giving information about use a property manager or not. I loved your blog and thanks for publishing this!! I am really happy to come across this exceptionally well written content. Thanks for sharing and look for more in future!!
Thanks for reading!
It is really a great idea to hire a property manager to lessen all the work and it can save time, effort, and money. Thank you for sharing your thoughts.
Yes, I totally agree Michelle!
I like how the person in between the owner and the tenants is the property manager. They allow the tenant to always have someone to contact. Saves the owner from a lot of stress too.
Yes Chris, definitely reduces the stress for the owner and probably better for the tenant as well.
My cousin has been thinking about getting some better property management for his properties in order to be more effective. Making sure that they can get some help from a professional could allow them to be more effective. I liked what you said about how they should know how much time they have to invest, and take care of the main maintenance in a timely manner.
I totally agree Adam. Having a good property manager as an owner allows you to free up your time to find more deals.
Thank you for sharing about use a property manager or not, these will be really helpful for me. I love reading this blog; it talks so much about planning a great idea about it. Keep sharing such informative articles in future, will be appreciated.
I was not aware that a property manager can help you to manage the day-to-day details of running your property. My wife has been thinking about how to improve our rental property efficiency, and we are looking for advice. I will make sure to contact a property management company to help us.
You made a great point when you said that outsourcing property management means that you can assure any tenants you have quality when it comes to the work done. They will have the experience and their full attention to hire the proper professionals to do the maintenance your property needs. I’m planning on making our family’s beach house into a vacation property for rent and having proper maintenance will be important to make it appealing for any potential tenants. I’ll be sure to look for the best vacation property rental management services I can find, and hopefully, the place starts turning a profit soon.
A friend of mine runs a holiday rentals management company in Australia. Having a property manager is very important if you do not have much experience managing rental homes or have multiple properties. Also, it is always a good idea to keep a middleman who can always contact your guests. Providing good service will result in a good review, attracting more guests. Having a property manager would not be a bad idea if you get a good income and can avoid all the hassles of managing guests and maintaining the property.
Yes, so true Steve!
You made a good point that hiring a residential property manager can also help in doing emergency repairs if needed. I’d like to know more about that because I want to invest on rental properties soon. It will be difficult to manage that on my own.
You made a good point that I should also look for managers with hands-on experience when planning to invest on rental homes. I’d like to start focusing on real estate investment because I’m interested in looking for ways to grow my money sooner or later. I think that would be a lot more feasible if done earlier in my life.