If you’re thinking of buying a rental property, it’s important to decide whether to hire a property manager. It’s the right move for many investors – but for others, not so much. This guide outlines the pros and cons of hiring a property manager for your rental so you can make the best possible decision.
What Does a Property Manager Do?
Property managers handle virtually every aspect of running a rental. They can put it on the market, find and vet tenants, and handle everything for you after your new tenants move in. They typically collect rents, negotiate lease terms and handle the legal side of being a landlord so you don’t have to. With that said, there are several pros and cons to hiring a property manager, which the following sections explain.
Pros of Hiring a Property Manager
The most common reasons people choose to hire property managers include the facts that they:
- Market your property
- Vet tenants
- Deal with tenant disputes
- Collect rent
- Handle lease terms and renewals
- Understand fair housing laws
- Coordinate work on the property
- Deal with evictions
Here’s a closer look at each.
Property Managers Can Market Your Property
Trying to find good tenants can be a full-time job – and a frustrating one, at that. A property manager can take care of all the marketing for you, so you don’t have to worry about it. They’ll list your property on appropriate websites, show it to prospective tenants, and screen them to make sure they’re good fits.
Property Managers Can Vet Tenants
After you’ve found some prospective tenants, it’s important to vet them carefully before you sign a lease. A property manager can handle this process for you, conducting background and credit checks and verifying employment information. This helps to ensure that you’re renting to a responsible tenant who is likely to pay their rent on time and take care of your property.
Related: Hard money loans, explained
Property Managers Can Deal with Tenant Disputes
If you’ve ever had to deal with a difficult tenant, you know that it’s not always easy – or fun. If you have a property manager, they’ll be the ones dealing with difficult tenants, not you. They’ll handle everything from late rent payments to noisy neighbors to damage to the property.
Property Managers Collect Rent
Another big advantage of hiring a property manager is that they can collect rent for you. This means you don’t have to worry about tracking down tenants who are behind on their rent or dealing with the awkwardness of asking them for money. Your property manager will handle it all, so you can just sit back and wait for your rent check to come in.
Property Managers Handle Lease Terms and Renewals
When it’s time to renew a lease, a property manager can handle the negotiation process for you. They’ll work with the tenant to come up with a fair lease agreement that works for both parties.
Related: What is a turnkey rental property?
Property Managers Understand Fair Housing Laws
There are a lot of laws governing rental properties and the relationship between landlords and tenants. A property manager is likely to be more familiar with these laws than you are, so they can help you avoid any legal pitfalls.
Property Managers Coordinate Work on the Property
If you need to have work done on your rental property – whether it’s routine maintenance or a more major repair – a property manager can coordinate it for you. They’ll find a reputable contractor, get bids and make sure the work is done properly.
Property Managers Deal with Evictions
No one likes to deal with evictions, but unfortunately, they’re sometimes necessary. If you have a property manager, they’ll be the ones dealing with the legal process and actually evicting the tenant. You won’t have to lift a finger – except to sign the eviction papers, of course.
Cons of Hiring a Property Manager
While there are definitely some advantages to hiring a property manager, there are also a few potential downsides. These include the fact that:
- They cost money
- You don’t have a hands-on experience
Let’s take a closer look at each of these.
Hiring a Property Manager Costs Money
One of the biggest potential drawbacks of hiring a property manager is that they do cost money. You’ll have to pay them a percentage of your monthly rent, and you may also have to pay for things like marketing and advertising.
Related: 5 hidden costs of being a landlord
You Don’t Have a Hands-On Experience
If you’re the type of person who likes to be involved in every aspect of your rental property, hiring a property manager might not be the best idea. You won’t have as much control over what goes on, and you may not be as involved in the day-to-day management of your property.
So should you hire a property manager? Ultimately, the decision comes down to your personal preferences and needs. If you’re willing to pay for the convenience and peace of mind that a property manager can provide, then it’s probably worth it. But if you prefer to be more hands-on with your rental property, and if you have the experience and know-how to do so, you may want to manage it yourself.
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