As a real estate investor, you may be faced with the prospect of hiring a property manager. But should you do it? What does a property manager do? This guide explains.
What Does a Property Manager Do?
A property manager is a third party who is hired to oversee the daily operations of a real estate investment.
The property manager is responsible for tasks such as:
- Screening and selecting tenants
- Collecting rent
- Maintenance and repairs
- Accounting and bookkeeping
- Adherence to local, state, and federal laws
Why Would You Hire a Property Manager?
There are several reasons why you might consider hiring a property manager. You may want one if:
- You live in another city (or even in another state)
- You have more than one property
- You don’t want to deal with tenants or the business end of being a landlord
Here’s a closer look at each.
Reason #1 People Hire a Property Manager: They Live in Another City
If you own rental property in another city or state, it can be difficult to manage it yourself. A property manager can take care of the day-to-day tasks, so you don’t have to worry about it.
Reason #2 People Hire a Property Manager: They Have More Than One Property
If you own more than one investment property, it can be time-consuming to manage them all yourself. Hiring a property manager frees up your time so you can focus on acquiring more properties.
Reason #3 People Hire a Property Manager: They Don’t Want to Deal With Tenants
Some people simply don’t want the hassle of being a landlord. If you’d rather not deal with tenants, repairs, or any of the other day-to-day tasks, hiring a property manager is a good solution.
What Does a Property Manager Cost?
Property management fees vary, but you can expect to pay anywhere from 5% to 10% of your monthly rent. So, if you’re collecting $1,000 in rent each month, your property manager will likely charge you $50 to $100 per month.
Some property managers may also charge a one-time initial set-up fee, usually equal to one month’s rent. In addition to the monthly management fee, you will also most likely be responsible for paying your property manager’s expenses, such as:
- Advertising fees: If your property manager needs to find new tenants, they will likely charge you for the cost of advertising.
- Maintenance and repair fees: If your property needs any repairs or maintenance, your property manager will likely charge you for the cost of those services.
- Legal fees: If your property manager needs to evict a tenant, they will likely charge you for the cost of their legal fees.
Is Hiring a Property Manager a Good Idea?
There’s no right or wrong answer to this question – it depends on your individual circumstances. If you feel like you can’t manage your property yourself, or if you simply don’t want to, hiring a property manager might be a good idea. Just be sure to do your research and choose a reputable, experienced property manager who you feel you can trust.
How Do I Find a Property Manager?
If you decide to hire a property manager, the best way to find one is to ask for referrals from other real estate investors in your area. You can also search online for property management companies in your area. After you’ve found a few companies, be sure to read reviews and compare prices before making your final decision.
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