Many people think investing in rental properties is a good way to build equity and create a steady stream of monthly income for themselves, potentially providing for an early retirement. They're usually not wrong, either. However, those properties have to be managed, and that's not a job everyone has the time for or is necessarily well equipped to handle. Hiring a property manager can take care of that problem for you. Here is what you need to know.
What Services Will A Property Management Company Handle?
Most companies will take care of finding new suitable tenants, which includes advertising vacancies; conducting background checks, showing rental properties, overseeing leases and ensuring they are adhered to, collecting security deposits and rents, handling complaints, scheduling routine maintenance and repairs, move out cleanings, and general oversight of your properties. The nice thing about a property management company is they provide a service so you don't have to deal with hiring an employee.
Who Should Hire A Property Management Company?
If you own just one rental unit, the added expense of paying for a property manager likely wouldn't be for you. However, if you have several rental properties with multiple units each, you should strongly consider hiring a management company. Most people simply aren't prepared to make managing their rentals a full-time job.
Property owners who don't live near their rental properties should also consider hiring a management company. It can be extremely time consuming trying to manage a property long distance, and without regular oversight, you won't have the peace of mind that your tenants are properly caring for the rental.
Some property owners, particularly if they have reached retirement age, no longer have the desire or ability to care for their rental units themselves. If you've reached the point in life where you just want to collect the income and leave the hassles to someone else, a property management company might be the right solution for you.
If you have several rental units, you can likely afford the cost of a property management company. Before choosing one, get quotes, but expect to pay anywhere from 5-10 percent of your total monthly rents for their services. For many people, this is money well spent.
Property owners who participate in local or state low-income housing programs should also strongly consider hiring a property management company. The laws and regulations that govern these rental units can be overwhelming.