Managing the Money Pit: Is Hiring a Property Manager the Right Thing for Me?

Managing the Money

As the economy begins to rebound ever so slowly, (or so it seems) people who were in the fortuitous position of being able to capitalize on the housing market may be finding themselves in a new position.  It’s easy to think that the job of managing a property is simple.  You find a tenant, fix the dishwasher when it breaks, and collect rent, right? Particularly for a new landlord, the sheer number of tasks associated with managing even a single additional property can be overwhelming.  As a result, one of the best actions a new landlord can take is to get in touch with a reliable property management firm, particularly if your newly acquired property is not local.

It is common knowledge that rents are different nationwide.  A 3-bedroom home in Iowa City can cost a fraction of the amount of a studio apartment in New York City.  After inquiring into the prices of property management services nationwide, the cost of hiring a property manager, generally speaking,  ranges from about eight to ten percent of the monthly rent.  This raises the question for many landlords, “Is it worth it?”

Lots of maintenance requests on your rental property? A property management firm might be just what you need!

Property management companies act as caretakers, attending to any and all needs.  If you own a property that is not within easy driving distance from your home, property managers act as your eyes and ears on the ground.  Facets of property management as varied as marketing, tenant screening, rent collection and maintenance all fall under the umbrella of services provided by management companies, and while this may not seem significant at first glance, the 6th time a toilet has to be fixed in the middle of the night, it might mean that much more.

Additionally, property managers give you an extra level of insulation, metaphorically speaking.   If you were to experience any difficulties with a tenant, such as non-payment or conflict of any kind,  property managers are a valuable front line of defense, helping to mediate any issues that may arise.

Moreover, while property managers are not considered legal experts, full-time property managers have a great deal of experience with rental law, and can provide you with valuable advice with regard to protecting your property assets.

Furthermore, once a tenant moves out and moves on, you’ll need to advertise the vacancy so there is no significant loss of income for you and your family.  Managing listings, whether you’re advertising using the network or your local newspaper takes time and money.  However, it’s a struggle for many landlords to take time out of their daily lives to show the property and find responsible tenants with whom they’re interested in entering a long term commitment.

Property managers act as stewards, protecting some of the most valuable assets in your portfolio.    Ultimately the decision comes down to you.  How much is your time worth to you?  How much effort are you willing to put in?  Essentially, how much does your time cost? If it’s more than 8-10%, a property manager might be the perfect gift to give yourself this holiday season.

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