Whether you’re an accidental landlord or an investor with income property, you’ve probably considered hiring a manager to oversee your rentals. A property manager is someone who interacts with your residents and takes complete responsibility for your property while you sit back and collect rental income.
A landlord wears many hats. Some duties include providing customer service, managing contractors for repairs and enforcing lease terms. But, there’s also much more involved and it’s a 24/7 job.
Hiring a property manager can be a relief for new landlords. Instead of getting a crash course in management, there’s someone by your side to guide you. Even landlords with experience can benefit from property management if they live out-of-state or own multiple rentals. A manager is your eyes and ears while you’re away.
They also act as the buffer between you and your residents. Let’s face it, dealing with tenants isn’t always smooth sailing. Property managers communicate with tenants on your half so you can avoid awkward conversations about late rent or taking calls for emergency maintenance after hours.
Another advantage of working with a management team is they’re well-versed in landlord-tenant laws. Each state has laws to control how landlords handle certain situations like returning security deposits or evicting residents.
It’s crucial to know what you can and can’t do as a landlord otherwise you can run into trouble. If you don’t have time to study landlord-tenant code, a property manager with the experience can handle your affairs and help you overcome the learning curve.
The downside of property management is the cost and the contracts.
Generally, property managers charge a percentage of rent (usually 4% to 10%) or a flat rate which may be up to one month’s rent. It’s a significant investment, so if you do decide to hire someone the service they provide needs to be worth the money.
There are bad seeds in the property management industry just like any other industry. Weigh your options carefully to choose the most qualified candidate in your area. You need to hire someone who can keep your rental occupied, respond to calls promptly and communicate before making decisions that impact your wallet.
You should read through all management agreements with a fine-tooth comb. Make sure the company doesn’t charge a fee when your rental is vacant or your tenant stops paying rent.
Be cautious of binding contracts that include a cancellation fee if you decide to cut ties. Look for companies with systems in place to record financial transactions like rental income and maintenance expenses.
Ultimately, deciding to hire a landlord is a personal choice. Of course, you can save big with a do-it-yourself approach if you have time to learn, keep detailed financial records and communicate with your residents.
But if you can spare the cash, hiring a property management company is a convenient way to earn passive income from your rental.
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