Hiring a property manager is a big decision, and often, those who want to retain control avoid doing so until necessary. However, in their need for control, they may be doing more bad than good to their investment. Here we list down the pros and cons of hiring a property manager vs. handling your estates yourself to help you decide the right time to hire a property manager.
- Full Control – Self-managing your property holds a certain charm. It provides you complete control over your investment, which helps ease some of the anxiety associated with the handing over of duties.
- No fee to pay – The most exciting aspect of self-management is probably the fact that you get to keep all the profits.
- Learning experience – For those who seek new experiences and want to become experts in their field, self-management is the best option. There is a learning curve involved, which is ideal for both personal and professional growth.
- Very demanding – Despite its appeal, property management is a very demanding job, and it only gets worse with time. As your investments grow, so do the responsibilities, and you may find yourself over-taxed.
- Insufficient resources – You as a DIY landlord are bound to lack resources that property management companies have access to. Without them, you won’t be able to efficiently screen potential tenants or run adequate background checks.
- Handle all paperwork – you will have to deal with rent collection and eviction notices besides having to manage all other legal matters as well. Leasing, tax filing, and drawing up contracts will all be your responsibility.
- Mistakes can be costly – A simple error in judgment or an oversight in the contract can cost you a substantial amount of money.
- Uncontrollable maintenance expenses – Traveling to and from the property each day can be very costly. In fact, depending upon the distance, it can substantially reduce your profit margin.
Hiring a property manager
- Experienced professionals – There is no learning curve here, so no space for trial and error. Property managers are well trained in their field and hold the market experience that can significantly benefit your investments.
- Frees your time so you can enjoy – Hiring a property manager to deal with the daily tasks leaves you with time for yourself. It provides you the much needed time to enjoy the benefits of your investments.
- No more maintenance issues – An efficient property manager will reduce the response time for maintenance complaints, which proves beneficial for you in the long run.
- Shorter vacancy periods – Professionals have contacts within the industry, which can help reduce the vacancy periods. The company’s resources also prove beneficial during the screening process. They can run faster and more extensive background checks.
- Tenant retention – Property managers are well equipped to deal with tenants and focus on building relationships. By providing timely responses to complaints, they can also significantly improve tenant retention.
- Lack of Involvement – When hiring a manager, be prepared to relinquish control. You will be paying them to make crucial decisions and tasks from rent collection to marketing.
- Expensive – They do, however, come with a fee which, in most cases, is quite high. However, when you run a cost-benefit analysis, you will realize that even with such a high fee, hiring a manager may be the best decision.
As clear from the above-listed pros and cons of hiring a property manager, it is always beneficial for the investor to hire the services of a professional. This holds true, especially if they feel overwhelmed or find self-managing their properties quite expensive.