Self Manage or Hire a Property Management Company
When should you hire a property management company? Always the question arises when you become a real estate investor and rental property owner, should you self-manage or hire a property management company for your rental property?
Ron Leshnower at NOLO suggests you should consider hiring a property management company if:
- You have lots of properties or rental units.
- You don’t live near your rental property.
- You’re not interested in hands-on management. If you view rental property ownership strictly as an investment and want little or nothing to do with the day-to-day management of your properties.
- Your time is limited.
- You can afford the cost.Hiring a property management company is an attractive option if you can afford the fees. When interviewing companies, expect to hear quotes ranging between 5% and 10% of what you collect in rent revenue.
- You’re suddenly inundated with management tasks.If your business is growing, at some point you may find that you need a substantial amount of help to manage everything properly.
- You don’t want to be an employer. A property management company isn’t your employee (it’s an independent contractor), and neither are the people who work for the company, by using one you avoid the hassles of being an employer.
- Your property is part of an affordable housing program.Usually, in these programs the landlord receives financial assistance, which may be in the form of a grant, low-interest loan, or tax credits, in return for agreeing to rent at least part of the property to tenants earning below a certain income level. In order to continue receiving the assistance, the landlord must comply with a complicated set of rules. With so much at stake, it’s often worth hiring a property management company.
What does a property manager do?
The recent article in Inman cites five main things special to a property manager:
1. Finds the right tenant. The cost of choosing the wrong tenant is steep — in terms of time, money and, in some cases, legal difficulties. Finding and placing a qualified tenant demands both diligence and knowledge. A qualified tenant is a tenant who passes a background and credit verification check as well as receiving a good reference from current and past landlords and employers. Finding a qualified tenant also involves setting a rental price, and advertising.
2.Creates a good lease.
3. Fixes things that break. If something breaks, leaks, bursts or wears out — it’ll be the property manager’s responsibility to determine the cause of the problem and get it fixed.
4.Collects rent and handles evictions.
5. Keeps track of income and expenses. Finally, there’s the task of accounting. Tracking the income and expenses for a rental property isn’t just a good financial habit for her to build — it’s the law.
What does a property manager cost?
The average property manager charges somewhere between 50 and 100% for the first month’s rent as a finder’s fee and then 8 to 10% of the monthly rent. A renewal of an existing tenant would not generate a finder’s fee.
Finally, where do you find a property manager?
1. Ask for referrals to property managers. Talk to real estate agents and other property owners in your area. Find out what they liked and where there were problems.
2. You can also do an online search for property management companies. Websites like T-Rex Global and AllPropertyManagement allow you to plug in the size of your property and your location and they will generate a list of property management companies in your area.
3. Interview several property managers/management companies so you can find the one you are most comfortable entrusting your property to.
4. Check Their License and Certification. You should check with your state’s Real Estate Commission to see if their brokerage license is active. Has the company or manager been certified by a trade organization such as the Institute of Real Estate Management (IREM), National Apartment Association (NAA), National Association of Residential Property Managers(NARPM) and the Community Associations Institute (CAI). These organizations offer certification after completion of a rigorous training program.
5. Examine the management agreement. The management agreement should clearly define the responsibilities of the property manager and that of the property owner.
Above all, a great property manager enables you to stay on the right side of the law.
At Val Buys Houses LLC, we specialize in helping homeowners out of just about any situation, no matter what! There are no fees, upfront costs, commissions, or anything else. Just the simple honest truth about your home. We buy for cash, therefore we can help you sell it fast to resolve any situation, or give you as much time as you need.
We care about our community in Cobb county and Atlanta. At Val Buys Houses LLC we take a lot of pride in providing excellent customer service. We have come across all scenarios, we are not here to judge; only to help.
Give us a call today at 404-844-8845 and let us see if we can help YOU!