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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. If you own rental property, you 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.
How Much Do Property Managers Cost?
Having a property manager is great, but they also come at a cost! The cost is a big determining factor when deciding to use a property manager 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 managers 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 a fee 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.
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. 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 Handy. Handy 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.
Booking a cleaner on Handy is especially useful if you Airbnb your properties and clean very often.
- 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 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.
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.
- 10 Tips For Buying Your First Home
- 5 Great Reasons To Invest In Real Estate
- Real Estate Investing Guide: 3 Simple Steps To Be Successful
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