The day you purchased your first property was the beginning of an incredible world of opportunity.
Then you picked up a few more– and you could sense the momentum…
… but just ended up feeling like you wanted to pull your hair out.
As you’ve no doubt realized, managing a property takes a lot of work, and that only compounds the more properties you own.
That brings us to the question you’ve been asking yourself: should you hire a property manager?
To do that, let’s start from the top.
If you’re completely unfamiliar with property management and what a property manager does, the next two sections will make that crystal clear.
If you’re already familiar, feel free to skip ahead to the pros and cons section.
Lastly, if you’d prefer not to hire a property manager, we’ve got an alternative at the end if you’d prefer to manage your own property but need a way to:
- Increase efficiency
- Reduce time spent on day-to-day activities
- And even automate some tasks
Let’s get started.
What is a property manager?
A property manager is a company or individual hired to manage a property.
This can include everything from collecting rent to completing maintenance requests by either utilizing their own in-house team or outsourcing vendors.
What does a property manager handle?
Exactly what does a property manager do?
We touched on a few items above, but let’s cover the full list of potential tasks a property manager can take off your back.
A property manager, or property management company, can handle just about everything. Including:
- Advertising to find tenants
- Leasing and screening
- Moving in and moving out
- Adjust (based on market value, etc.) and collect rent
- Handling maintenance requests and repairs
- Taking care of issues including complaints and evictions
Here’s an example from a property management company that offers strictly tenant placement services:
If you’re currently managing all of your properties, the idea of passing off all of these tasks might seem like a difficult idea to swallow.
However, what is just as difficult is having to manage all of these things yourself, especially if you have more than just a few properties.
Fortunately, there are other options than hiring a property manager (one which we’ll talk about later).
But depending on how many properties you’re dealing with, getting help could be exactly what you need.
Pros of hiring a property manager
Now, let’s talk about the pros and cons of hiring a property manager.
By the end of these two sections, the goal is to have laid everything out for you to decide for yourself if hiring a property manager seems like the right choice.
Pro: They handle all day-to-day activity
There are a few real time sinks when it comes to managing a property.
For example, frequent phone conversations with tenants and vendors and handling maintenance requests.
The average property management company will help take all or most of those day-to-day items off your plate, saving you a ton of time for more high-value activities (like identifying new properties or maximizing property revenue).
Pro: They’ll manage rent and other fee collection
From setting rent prices when the market goes up to collecting rent on time, typically, a property manager or company will stay on top of rent so you don’t have to worry about a thing.
That includes not only setting and collecting rent, but managing late fees and other tenant responsibilities such as pet rent, parking and more.
Many property management companies will even analyze your local market competition to determine rent prices and perform other research to maximize rental income.
Pro: They’ll handle advertising and screening new tenants
One of the more difficult things to stay on top of is tracking the effectiveness of your advertising and screening process.
There are a few things your average property management company will likely do well, one of those is fill units.
From advertising to screening tenants, one of the focuses of most property management companies is keeping your units filled.
Typically, they’ve invested in property management software to help them more effectively run background checks and do leasing tasks, streamlining their system considerably.
So, you no longer have to worry about running ads for your properties or screening your own tenants.
Speaking of running ads: joining real estate investor associations in your area is a fantastic way to spread the word about your listings, connect with prospective tenants, and even learn more about real estate investing. If you do hire a property manager, encourage them to look into joining these associations if possible.
Pro: They’ll take care of maintenance and repairs
One of the biggest reasons to consider hiring a property manager is that they’ll handle all maintenance requests and overall property repairs.
Maintenance and repairs are easily one of the biggest time and energy sinks when it comes to managing a property. And, worst of all, they’re often unexpected and can get in the way of other plans.
Typically, a property management company will handle all maintenance requests from tenants and necessary repairs.
That can be done one of two ways:
- Through an in-house maintenance team, or
- By hiring their own vendors
Either way, you get the peace of mind knowing everything is being taken care of by professionals.
Cons of hiring a property manager
Now that we’ve covered the pros of hiring a property manager, let’s talk about the cons.
There aren’t too many, but they’re all things worth being aware of when you weigh your options:
Con: You’ll pay a portion of your rental income for their services
As you may have guessed, property managers don’t work for free.
How do they get paid? By charging a percent of your rental income. Typically, that fee is somewhere around 5-10%.
Here’s an example:
Keep in mind that every property management company is different, so you’ll need to check with them to see if they have any additional or unexpected fees.
Also, you’ll need to factor in that you’ll still need to pay for things like supplies and replacement items used for repairs, though that’s technically not an additional expense.
In all likelihood, this is the main con you’ll need to consider. If you just have a few properties, that fee might mean the difference between you being profitable or not profitable with your properties.
So, you’ll need to consider if the services you’ll get from a property manager are worth the fee– something only you can decide.
Con: You’ll give up some control over your property
Another notable con you should be aware of is the necessity to give up some control over your property.
Inevitably, for the property management company to do their thing, they need to be free to make certain decisions themselves.
Think of it like this: you’re the owner or CEO of your company and you have managers under you. You need to let these managers make some decisions on their own, otherwise, they’ll be completely dependent upon you.
Especially if you prefer to be more hands-on, this can be a difficult thing to accept. However, it’s ultimately up to you.
Con: You may not agree with their tenant screening process
One of the more difficult aspects of property management to give up is the screening and leasing process.
When you hand over the management of your property to a property management company, they typically take over all aspects of the leasing process. That includes screening applicants and ultimately deciding who to accept.
While this can be seen as a big pro as it’s something you no longer have to deal with, it can also be a pro because the property management company’s selection process might not match with the way you selected tenants (or what tenants you ultimately chose).
Should you hire a property manager?
So far, we’ve explored the benefits of hiring a property management company and looked at the cons.
By now, you probably already have a pretty good idea of whether or not you want to hire a property manager to handle one or more of your properties or not.
However, if you’re still unsure, here are a few common reasons you might choose to hire a property manager:
- You now have too many properties to manage by yourself: Even if you’re hesitant about the fee, if you now have way too much on your plate managing multiple properties, you need to do something.
- You’re having challenges managing your properties: If property management doesn’t come naturally, or you’re struggling to keep your units filled, hiring someone could help you make the most of your investment.
- The distance is a hassle or you’re moving away: If you live away from your properties, hiring a property management company might be a necessity to handle any in-person tasks or issues.
And key questions to ask:
- Do I have the budget (or: profit) to hire a property manager?
- How much time will a property manager save me?
- Is that worth the money I’ll be giving up?
With all this considered, only you can know if hiring a property manager is the right choice.
If you’re still unsure, though, there is another option you can consider.
It’s one that can save you a ton of time and hassle by making everything more efficient while allowing you to continue managing your properties yourself, whether by yourself or with a team.
How property management software can make things easier
The main challenge with property management is finding the time to handle everything.
With property management software, you get tools that allow you to save time in a variety of ways, whether it’s:
- Improve efficiency via features like a streamlined maintenance management system
- Optimize organization by bringing all your accounting into one place designed for property accounting
- And automating tasks through things like automatic listings and automatic rent payments
Plus, with DoorLoop’s all-in-one property management software, you can take advantage of other features that help you streamline your property management as well.
- A QuickBooks Online integration that takes minutes to set up
- Mobile app for easy access no matter where you are
- Lightning-fast load speeds
- User-friendly UI that’s super easy to navigate
If you prefer to manage your properties yourself, rather hire your own internal team to manage your properties, or are looking for something more budget-friendly, give DoorLoop a try.
You’ll not only supercharge your efficiency and improve your ability to collect rent (and more rent), you’ll save time and gain peace of mind in the process.
Schedule a free demo to see what DoorLoop can do for you.