When do you need a property manager?
A question every novice real estate investor needs to know.
Buying too many rental properties and taking on the job of managing them. In the end, it takes up too much precious time. Also, too many mistakes occur costing the investor money.
But, this blog post focuses on “when” you need a property manager and not as much on the “why”.
Eventually, the time it takes to manage your properties don’t justify the money saved.
When Landlords Need a Property Manager
Take a look at these reasons many investors/property managers lists for needing a property manager provided by Bigger Pockets:
- Number of units to manage;
- Investor’s proximity to the properties;
- Response rates (being available 24/7/365);
- Time it takes to turn over a unit;
- Maintenance and repair systems;
- Record keeping capabilities;
- Handling tenant collections, questions, evictions, etc.; and
- Stress!
Now, let’s explore these reasons in depth.
Number of units
Do you own one unit or multiple units?
Can you handle all the property management duties for all the units?
If you can’t, you need a property manager.
Proximity to the Properties
It’s one thing to rent out a unit in your duplex or triplex where you live. It’s another situation if you live in a different city or across town from your units.
If your rentals are too far away, you need a property manager.
Response Rates
When emergencies happen tenants don’t care if you live far away.
If the electricity or water stops working or the air conditioner breaks down during the hottest day of the year expect a call at any time. It doesn’t matter if the call occurs at 3 am or on a Sunday.
If you cannot be available every day of the year at any time of day to handle tenant emergencies, you need a property manager.
Time to Turn Over a Unit
Do you have the available time to manage your properties?
When a tenant moves out, do you have the time to clean the unit, make repairs, make it look nicer, place ads and look for another tenant, screen them, interview applicants, and negotiate rental prices and terms?
If not, hire a property manager.
Maintenance and Repair Systems
Do you maintain a current rolodex of licensed and insured professional repairpersons? Like electricians, plumbers, contractors, etc.
Will you Google search for the appropriate type of repair person and inquire about his or her experience, specialty, and fees when a tenant’s unit is flooding?
If not, hire a property manager.
Record-Keeping Capabilities
Got a real estate rentals accounting system in place?
What about a real estate rentals income and expenses accounting system for taxes?
Good at math and organizing income, expenses, and itemizing tax-deductible items?
If you answer “No” to any of these questions, you need a property manager.
Handling Tenant Collections, Questions, Evictions, etc.
Like collecting rents and chasing after delinquent tenants?
Tired of listening to excuses why the rent not paid yet?
Love getting calls at any time of day from tenants with lots of questions?
Get a kick out of evicting people and taking them to court?
If you answer “No” to all or even one of these questions, hire a property manager.
The Stress of Rentals
The biggest problem with rentals boils down to people management.
Does lack of sleep, ulcers, and other symptoms of stress resulting from rescuing tenants from emergencies, collecting rents, evicting the bad ones, and looking for new tenants appeal to you?
Dealing with late payments, bounced checks, angry neighbors, leaking toilets, sloppy tenants, etc. requires unique people management skills.
You not only deal with one tenant, but his or her family, personal relationships, pets, and their neighbors.
Screening potential tenants pose further problems and stress. An ideal candidate lied on the application. A criminal background check reveals a fugitive on the run or a spotty past. A credit report shows a bad credit score and history, especially with past rentals.
Dealing directly with tenants unearths their unique personalities and quirks. Many tenants bend the truth, manipulate landlords, and make lots of excuses.
Likewise, passionate landlords get suckered and scammed by tenants well-versed in the art of deception and manipulation.
To Sum It Up
To sum up, the above list requires lots of time and systems to reduce time. Besides, all the stress that property management causes.
If you got the time and can handle the stress, then do all the property management yourself.
On the other hand, if the time and stress appear to be too much, it’s time to hire a property manager.
The Traits of a Good Property Manager
A good property manager possesses the following traits:
- Good at screening applicants and finding quality tenants;
- Efficient at collecting rents and accounting;
- Reliable at responding to and servicing tenants;
- Fewer turnovers;
- Better maintenance and repair systems (knows a lot of licensed and insured professionals);
- Handles legal issues which reduce the investor’s liability; and
- Enables the investor to enjoy more time and freedom with less stress and more profits.
Finding a Good Property Manager
Certainly, many options and choices exist out there for in-house property managers and professional property management companies.
How do you find a good property manager?
Look for these attributes:
- How they handle the owner’s and tenants’ funds;
- Their policies about setting rental prices and collecting rents;
- How they handle tenant marketing, screening, retentions, and evictions;
- Their inspections, maintenance, and repairs processes;
- What types of monthly reports and financial statements they make;
- Their reputation, experience, company size, systems, and staff; and
- Look at their fees as reasonable or too expensive.
Conclusion
To clarify, when you need a property manager is when you don’t have the time, organization, people and management skills, and time-saving systems.
Therefore, answering the questions asked here lets you know if you need a property manager.
Save time, expense, and stress by hiring a property manager.
Look No Further
When you need a property manager as explained above look no further.
WeLease provides you with professional property management services in the San Diego area.
Our experienced staff helps you to understand the process of finding and retaining good tenants. Also, our record-keeping services provide you with the proof for every tax deduction to avoid paying unnecessary taxes. We are here to help you.
Contact Us to find out about our property management services and how they can help you.
Steven Rich, MBA – Guest Blogger
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