There are a number of different reasons why you either should or shouldn’t hire a property management company. Sometimes it’s definitely in a landlord or investors interest and other times it’s a terrible idea. So how can you tell the difference?
The main reason for not hiring a property management company is that they are often expensive, they can take a sizeable amount of money out of the profit you were hoping to make from renting your house. Many investors with a background or connections in the real estate market might opt to avoid hiring a property manager because they feel they are an unnecessary expense.
If you’re a do it yourself kind of person who doesn’t quite trust a company handling your affairs then you might not need one either. Just be prepared to invest a lot of time into learning the trade because this is no easy take and while there are plenty of different ways to approach managing your own property rental, a minor mistake can be fatal.
On the other hand, there are a whole host of reasons to get behind a property management company. If any of the following apply to you, it is definitely worth considering the financial sacrifice to keep your investment secure:
If the Property You Are Renting Out Isn’t Close to Your Home
Anybody with experience in renting out property will tell you the importance of keeping a close eye on your property. Many investors will specifically look for houses that are within a close proximity to either where they work or live.
If something goes wrong or needs overseeing, it is essential that you are on hand to ensure everything goes smoothly. Sometimes, however, it isn’t always possible to be close to your property and when that happens it’s probably going to be your advantage to hire a property manager. Having someone with experience nearby to handle any issues that might come up is handy and might just save you a long drive across the country to solve a minor problem.
If You Have No Time or Other Priorities
If you are incredibly busy or simply see renting a house as more of a side project, then it is probably a good idea to hire a property manager. You’d be amazed at some of the mole hills that can be turned into mountains by tenants, if your property isn’t a priority then you aren’t going to want to waste your valuable time dealing with minor issues.
You Aren’t Good with Finances
If you’re not good with figures, you struggle to pay bills on time or are a little bit unorganised you should definitely get a property manager. If you miss the wrong payment you could leave your tenants without essentials such as hot water or even land yourself a huge fine.
If You Don’t Have Much Experience
There are hundreds, if not thousands, of guides online showing you how to run a buy-to-let scheme. These aren’t bad but are typically very generic. If you don’t have much experience in renting out a property there are a number of mistakes you’re guaranteed to make.
If renting out properties is something you plan to do regularly in the future, this might not be an awful idea. You might make mistakes, but you’ll learn from them and develop a number of skills. On the other hand, these mistakes can be costly, if learning the skills of property management isn’t something you want to learn at the cost of your potential profit the best choice is to hire someone else.
Even if you do want to learn, it can sometimes work well to hire a property manager but request that they keep you in the loop with everything that is going on. If you keep a close eye on the decisions they make and why, it can help prepare you for when you start to do the process on your own.
For those who are still confident that learning the trade themselves is the right decision, keep reading, we have some trade secrets to help you get started and help you learn how to do property management successfully for yourself.
You Have Been Struggling to Find Tenants
Perhaps you held a vacant property for a few months now and you’re starting to worry. Maybe you haven’t even bought the house yet, but you’re worried about your ability to find tenants. Whatever your situation, one of the crowning skills of property manager is the ability to find tenants that pay you regularly and on time.
Property Manager will often have accounting departments and other extra resources that can ensure everything is paid on time and efficiently, meaning happier tenants who are less likely to leave.
Your People Skills Aren’t Great
This might seem like a really small problem, but it can definitely be a big underlying factor as to whether you can attract/keep tenants. We’ve all heard those ‘nightmare’ landlord stories from friends, family or in online articles.
While you might consider yourself a long way off from ever being one of ‘those types of landlord’, if you lack people skills it can have some consequential impacts. For example if something goes wrong with your home, but you are unable to effectively communicate the solution and time frame to your tenants, things are likely to escalate.
There will probably be situations at some point where you are required to diagnose and de-escalate conflict. This is a skill in itself and the majority of property managers will have honed and developed these skills with years of experience.
Having a good working relationship with your tenants is important and while it might not be essential it can definitely help save you from sticky situations in the long run.
You Don’t Know Much About Property Maintenance
A small mistake like calling out the wrong person for the wrong job can be incredibly costly. Also knowing when you can do a job yourself and when you should get a professional on board can be a game changer.
While many property management companies will have a ‘handy man’ who can handle a number of jobs really cheaply, it is still worth it knowing that you won’t ever be overpaying.
Contractors are able to smell inexperienced personnel a mile away and rinse them for everything they’ve got.
You Don’t Like Getting 2am Phone Calls
Sounds farfetched? Speak to anybody who has been a landlord or property manager and they will be quick to tell you some of their craziest stories. Without some extremely good fortune on your side, probability suggests that at some point you will get that dreaded phone call in the early hours of the morning.
You might even be unlucky enough to get a tenant who regularly calls in the early hours. There are all kinds of reasons, from a burst water pipe to a fire, or even on occasion a drunk tenant who has accidentally locked himself out of the house.
The underlying point is that, you can never predict what is going to happen. You should always be prepared for anything, especially some crazy, straight-out of a film, kind of situation.
Many people who have been working in the housing industry for a long time will claim that even having a bad property manager to act as a buffer between these situations is better than having to deal with it yourself. While this might not be completely accurate, there is certainly something to be said about having someone to handle all of the dirty work for you, even if it does cost 10%.
