Once you have a rental property, you need to decide how you are going to manage it. Are you going to be doing everything yourself, or do you want more of a hands off, truly passive income? Answering that question is essential to answering the next question, which is, “should I hire a property manager?”
There are pros and cons to either method, but the best way to figure out if a property manager is right for you is to take an honest assessment of your goals, as well as your current situation. Ask yourself the following questions and use your answers to help you decide.
1. Do you want to answer emergency phone calls at 2 am? Every landlord has had this happen at least once, and if the situation is bad enough for a tenant to call in the middle of the night, then it is probably something that needs to be addressed as soon as possible. If you do not want to be bothered in the middle of the night for tenant emergencies, you may want to consider a property manager.
2. Do you want to chase down tenants for rent money? It is a fact of life that occasionally you are going to have to confront a tenant about unpaid rent, possibly more than once. Do you want to spend valuable time that could be put to better use playing bill collector? If you answered no, you may want to consider a property manager.
3. Do you want to deal with the eviction process? Every once in a while, you may be forced to evict a tenant; this process can be lengthy and time-consuming, and it is not pleasant for anyone. If you are not prepared or able to spend the time necessary for this process, you guessed it, a property manager may be right for you.
4. Are you handy? An obvious reason to consider a property manager is repairs. If you are not handy enough to stop a leaky faucet in your own home, you definitely are not going to want to try fixing things in a tenants' apartment. In this case, you might not need a property manager, just a reliable repair man, but it all depends on how implied you want to be.
5. Do you have a day job? I saved this one for last because it is the most obvious. If you already have a full-time job and a family, you probably do not want to spend your spare time fixing things in someone else's residence. This is definitely a situation tailor-made for a property manager; your tenants are taken care of, and you do not have to sacrifice what little free time you have.
There are other factors that must be considered before hiring a management company, particularly how much they are going to cost you, (usually 10% of any rented collected). However, if you are looking for a truly hands off investment, or you do not have the time or ability to manage your rental properties by yourself, a property management company can be the answer to your problem.