If you invest in real estate, sooner or later you have to decide whether to hire a property manager to help out with your rental real estate. Hiring a property manager isn’t a decision you can take lightly, so explore the pros and cons of hiring a property manager to decide what’s right for you.
Here are the Top 5 Reasons why you want to use a Property Manager to effectively oversee your Worcester Housing.
1. How far do you live from your rental property?
If you live near your property it makes things much more convenient but if you have a moderate to lengthy commute you’d need to factor in your time and expenses to get to the property. If you live a distance away it is very easy to let things go. You would not have the availability to simply drive by the property.
2. How well do you manage stress?
There are going to be some days of stress owning a property. One of the more stressful situations is late rent payments and damaged property. If you are not good with stress, then you might want to consider a Property Management Company. There are many unpredictable problems that could arise. These include loud neighbors, late night parties, lawsuits, and nonpayment of rent.
Eventually you will have to deal with tenant conflicts. Those issues can lead to significant stress.
3. Are you handy?
I’ve owned several properties and I am not especially handy but there are many things I can do. It’s hard work. One of the things you do need is accessible tradesmen and women. When the heat is off you can’t wait days for someone to get there.
4. Are you ok with getting calls 24/7/365?
When an emergency happens you need to be available. That includes when you are on vacation. Any personal crisis takes a back seat to your property.
5. How fast can you get your apartments rented?
It takes time and money to get your building occupied with good tenants. Advertising, fielding calls and showing your apartment are all very time consuming. You have to question if you have the skills and know how to get an apartment rented. A really good property manager knows how to screen and also has years of interpersonal experience that gives them valuable intuition.
As shown in the graph below, property rental revenue in Worcester Ma. is increasing faster than every city in Massachusetts. At a 16% increase, Worcester rivals the Boston suburbs. However, there is a limit you can charge. It makes sense to talk to area professionals before you buy. Your property rental income might not be sufficient to give you an adequate rate of return on your real estate.
What are the Advantages of Working with a Property Manager?
The top reason landlords hire property managers is to save time. While you may be able to manage a single-family rental on your own, as your portfolio grows you won’t have the time to spend driving all around town to address the needs of your renters. Sooner or later, you’ll face a choice on whether to quit your job so you can manage your properties full-time or hire someone else who can manage your rentals for you.
If you bring on a property manager, you’ll have much more free time and the peace of mind of knowing someone else is keeping up with the maintenance and marketing of your apartment rentals.
Speaking of maintenance, property managers can make suggestions on preventative repairs that will keep your rentals in top shape. Many property managers have a network of handymen so they can arrange a quick fix. You’ll save money over time by keeping major apartment systems in good repair, and you’ll never have to take off work to let in the plumber again.
Property managers tend to spend more time screening tenants than landlords. Whether it’s calling references or checking credit history, this due diligence pays off for you with higher-quality tenants. If you’re tired of renters who trash the apartment or pay rent late, you’ll love this benefit.
Even the best-intentioned landlord has difficulty staying up to date with laws affecting property management. A property manager will track state and local laws on your behalf, so you stay in compliance with regulations.
What are the Cons of Working with a Property Manager
While property managers have a lot to offer landlords, there are a few downsides to know. The most obvious is cost; property managers generally charge a percentage of the monthly rent for their services. That means less money for you. If you barely eke out a profit on rentals due to market rates, then it doesn’t make financial sense for you to give a cut of your meager profits to someone else.
Oversight is another consideration when thinking of hiring a property manager. Any time you outsource a task to someone else, you sacrifice control over the end result. If you dislike the idea of leaving it up to someone else, then you may prefer to handle rentals on your own.
What’s right for you as a real estate investor may change over time, and you may decide to hold off on hiring someone now, but move forward at a later date when your priorities change. Interview several property managers to get a feel for the scope and costs of their services, then weigh the pros and cons of moving forward. When you understand the costs and benefits of working with a property manager, you can make the best decision and evaluate the return on investment over time.