Every rental property does not need a property manager to keep things running smoothly. Finding the right property manager can be a big help. There are nine questions to help determine if working with a property manager is a good choice for your property.
1. Is your rental property close to your home?
If you are not close to your property, it is going to be a challenge to manage. If you live states away, you will have trouble finding renters, handling emergencies, maintenance issues, and even to collect rent.
The costs of getting to your property will add up. It may be worth it to hire a property manager.
2. How many rentals do you own?
The more units you own, the greater the responsibility you will have. You will need to deal with more tenants, complaints, and maintenance issues. You will need to keep track of the cash flow as well as traveling between properties.
3. How much management experience do you have?
If you are looking to invest in real estate but do not know about property management, it is a good choice to hire a property manager. Figuring out what you are doing can cost you a lot of time and money.
You need to have experience with the Fair Housing law, or you can see your investment go downhill. Keep in mind an incompetent property manager can also have an adverse effect on your business. You need to research property managers before making a final decision.
4. Can you afford a property manager?
Property managers often charge a fee between 4 and 10 percent of the monthly gross income on the property. For homes, the fee is around 10 percent.
For example, if you rent a single family home for $1,000 a month, you will need to pay the property manager $100. Some may even perform services for $50. If you own more properties that make $20,000 a moth the management would charge 5 percent of $1,000.
Some property managers will charge additional fees for tenant placement. The fee will vary from manager to manager.
5. Do you have the time to take care of the properties?
If you work full time and are looking to make money off the property, you cannot give it all the time it needs. If the property is going to take away from your regular job you should hire a property manager. Your time and money are better spent somewhere else, and the property is an excellent additional investment.
6. Are you will to let someone else have control?
Property managers will be in charge. They will file taxes and collect rent. Some people may not feel comfortable giving up control of their property.
7. Will you take on the liability of the property manager?
Property managers may make mistakes from time to time, and these mistakes can cost you money.
When signing a contract with property management, there is often a hold harmless clause in it. This is designed to help the property manager expect if they are found to be grossly negligent. The reasonability will go to the owner of the property.
For example, if the property manager is found to violate the Fair Housing law and a complaint has been file the owner of the property is liable even though they had nothing to do with the deal.
8. Do you have cash flow issues?
An excellent property manager can work with reliable repair people and people that are willing to come out in emergency situations. They also know the laws regarding landlords and tenants, so this will reduce the chance of a lawsuit from happening.
9. Can you deal with tenants?
If you get stressed out with the thought of an eviction, maintenance, or complaint you need a property manager. They are trained to handle conflicts. They know the landlord-tenant laws and can help defuse the problem. A tenant knows they will be dealing with a third party and may be more civil.
You do not have to hire a property manager just because you are looking to invest in a property. Experience is the best thing for success, and if you educate yourself about investments and property management, there is a good chance that you will become successful.
So, you don’t have the time to manage your own property? Maybe you should be using a property management company like the guys at Red Hawk. They’ll help you out:
Red Hawk Property Management Mesa AZ
2451 E Baseline Rd Ste 410, Gilbert, AZ 85234, USA