Whether you live far away from your properties, you're sick of fielding emergency calls from tenants or you're just too busy, you've decided to hire some help to manage your rentals.
But before you pick up the phone to hire a property manager, consider whether you need a right-hand man or the might of an entire company to manage your real estate.
When You Should Hire an Individual Property Manager
Consider hiring an individual property manager if you have the following preferences:
- You want to build a relationship with one person. You'll never have to speak with a secretary, your messages will never get lost, and your property manager will know you by name.
- You have only a few rental properties. With only a few properties, you're more likely to get individual attention and quick problem resolution when working with a single property manager.
- You want a straightforward payment structure. Larger property management companies tend to have complicated invoices with multiple fees. Smaller businesses often charge a flat fee for management services.
- You want a property manager to handle only part of the managing duties. If you prefer to choose your own tenants or want to make your own repairs, consider an individual property manager. An individual manager will often divvy up responsibilities rather than insisting that you purchase an entire management package.
- You want to set your own rules. Want to be contacted before the manager spends more than $100 in repairs? Prefer a certain type of paint? Larger property management companies often have a list of one-size-fits-all rules you must follow. Individual property managers are more likely to follow your own preferences.
The most difficult part of hiring an individual property manager is finding a good one.
Many individual property managers are real estate agents who earn some extra money managing a few properties. Therefore, they rarely advertise.
If you decide you want to hire an individual, be prepared to network with other landlords to find someone.
You can also search the membership directories of the Institute of Real Estate Management or the National Association of Residential Property Managers.
When You Should Hire a Property Management Company
Larger property management companies are better if you have the following expectations:
- You want 24-hour responsiveness. Property management companies always have someone to take your call, and you should never have to leave a voicemail.
- You own several rental properties. A company may offer volume discounts and other incentives if you want them to manage multiple properties.
- You want a full-service experience. If you want a company that will advertise a rental property, fully screen tenants, make repairs and regularly market your rentals, you'll probably get better overall service from a larger company.
- You expect quick turnover. A property management company often has connections with local tradesmen or employs a staff to quickly turn over rental properties. This means your rental property can be freshly painted and ready for new tenants in a few days.
- You want to participate in government housing programs. Affordable housing programs can be lucrative, but it's very important that you follow the rules to gain all of the tax credits and other government incentives. In these cases, it's best to hire a property company that has experience with these specific housing programs.
Large property management companies should advertise and have an online presence, so it should be easy to get a list of local business to investigate.
Scrutinize the company's social media accounts and any online reviews, and ask for references from current clients before signing a contract.
Also, ask for a full list of fees before signing a contract.
Some companies charge inflated fees for basic equipment or require that you sign up for a certain amount of services in order to hire them.
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