6 Tips for Hiring a Property Manager
Rental property can help you earn extra income or become a lucrative business endeavor all on its own. Whether you’re renting a single-family home, a condominium or a whole building of apartments, managing the day-to-day of your building can be tough. It’s especially difficult if you live far way and nearly impossible if you’re out of state. Hiring a property manager can help you handle daily tasks that you don’t have time for.
Collecting rent or making repairs requires skills that not everyone has, nor are they jobs everyone likes to do. Property managers are especially helpful when it comes to finding new tenants and tackling sticky situations like evictions. Hiring a property manager isn’t as simple as it might seem though.
Use these six tips to learn more about hiring a property manager. From large-scale investment properties to single-family homes that you only use in the winter or summer, having a property manager on your team can help you maximize your earnings or manage off-season costs.
1. Know Why You’re Hiring a Property Manager
Hiring a property manager can be helpful for many owners, but it isn’t required. Before you choose to go with one, you need to know why you’re hiring them. Having this information handy can also help you explain what you’ll need from a potential manager.
Here are a few common ways a property manager can help:
- Finding tenants for vacant property or units
- Collecting rent
- Making or managing repairs and maintenance
- Handling evictions, noise complaints and tenant issues
2. Consider the Cost of Hiring a Property Manager
Property managers all have unique rates, and while a range might be common, there’s no exact figure for property management services. Rates also vary by area and in different markets. Services offered by a particular property manager can impact rates as well.
However, if you do choose to work with a property manager, you will need to pay them, and this can eat into your profits. If you have a single home or unit in a nearby area, paying a property manager could be cost-prohibitive for you.
Your best bet is to contact a variety of property managers near your rental unit or units and discuss your needs with them. Many property managers offer discounted per unit rates for apartment buildings, condominiums or owners with multiple single-family homes.
3. Choose Between an Individual or Property Management Company
Property management companies often have a high-profile, making them easy for investors and owners to find. Individual property managers may be able to offer many of the same services however, particularly if you’re dealing with only a few properties or rental units.
Assuming that individual property managers will be more cost-effective may be misguided though. When shopping for a property manager, you’ll need to talk to a range of people and companies to find a rate that matches your management needs and budget.
Don’t rule out an individual or steer clear of larger management companies until you have the chance to talk with at least one or two of each.
4. Check References and Qualifications
Trusting somebody you’ve only just met with your valuable property can be difficult. Meeting in person and seeing that you can communicate clearly with them can help alleviate concerns. Finding a property manager isn’t something you should do on gut instinct alone though.
Any qualified property manager will be able to provide working references and qualifications. Check these references and verify qualifications and membership in professional organizations. The peace of mind they’ll provide is essential whenever you hire a new property owner.
5. Have a Lawyer Look at Your Agreement
References and qualifications can go a long way toward quelling your fears and reservations. If you’re new to working with a property manager though, there’s a lot you likely still don’t know. Even experienced owners can miss important details in agreements full of legalese.
That’s why hiring a qualified attorney to look of your contract with the property manager or property management firm is essential. Most attorneys can evaluate a contract in a billable hour or two. Some even have rates for document approval.
In the end, it’s money well spent. Don’t skip this step.
6. Learn to Let Go
You’ve found an individual or property manager that seems trustworthy and up to the job. You’ve checked their references, seen their qualifications and agreed on a rate that everybody finds fair. Now it’s time to cede at least a little bit of control to your property manager and let them do their job.
For many owners, letting go can be hard. Micro-managing an experienced professional can create friction and result in crossed wires that are actually bad for you, the property manager and your tenants.
Of course, you can still stay abreast on what’s happening at your property, but consider letting your manager handle the day-to-day without extra input. A weekly check-in on Friday afternoon or Monday morning might be all that’s required unless an immediate issue needs resolution. E-mail is also a great way to communicate about maintenance projects and more involved tasks so that you both have a record of your conversation and what needs to be done.
Is a Property Manger Right for You?
Investment property can be lucrative, helping you earn money in a passive way that’s truly unique. Renting property can also help you offset costs of seasonal homes you enjoy owning, but don’t use half the year or more. The day-to-day management, particularly if you live in a different city or state can be very tricky though.
Hiring a property manager is one of the best things you can do to take the burden of rent collection, repairs, finding replacement tenants and evictions off your plate. If you have multiple properties or units, a property manager is all but required to keep your investment in tip-top shape and running smoothly.
When choosing a property manager, take your time to do interviews even if you must do them on the phone. Check the references you’re given and compare rates. You may even be able to negotiate for better terms if you’re well-informed.
Once you find a property manager you trust you’ll wonder how you ever worked without them.