Should you use a property manager for your property?

By
Real Estate Agent

The biggest decision, as a landlord or property owner, is arguably whether to use a property manager or not. The whole idea of being your own landlord can be exciting and as well tedious. If you own a property rental, dealing with tenants can be a tough time.

 

When then should you hire a property manager or why do you need a property manager? You probably must have thought about these questions. However, before you make the decision, there are certain things you should consider. Below are some of the things to consider before choosing a property manager or not. Before we go into details of things  to consider:

Who Is A Property Manager?

A Property manager is a person or company charged with the responsibility of managing a property on behalf of the owner. It is usually done at an agreed fee. That is, the property manager is a real estate professional that is hired by the landlord or property owner in order to manage their property. A property manager is also known as an estate manager.

 

What this also means is that the property manager gets to manage the day to day activities of the property. However, the amount of responsibility depends on the property and the terms of agreement. The terms of agreement is usually between the property manager and the property owner.

 

By now, you should have an overview of who a property manager is and what they do. So the big question is, should you hire one or not? The points below should help you make your decision.

How many property unit do you have?

Being a landlord of a single property has its own amount of stress. However, it cannot be compared to owning multiple properties. The more the number of properties you have, the more the responsibilities. Especially for a rental property, it only means one thing - more tenants. With more tenants comes more complaints, maintenance issues and sometimes, vacancies.

 

The process of managing all of them alone can be tasking. Having multiple properties means more time to properly oversee the properties and manage the cash flows. In some cases, it might even require you go from one property to another. The whole task can be overwhelming and this should help you decide if you need a property manager or not.

Is Your Property Close To Your Home?

The proximity of your property to your where you live is another factor to be consider. Managing a property that is a street away or in cases that you live within the property can be easy. It cannot be compared to having a property that is miles apart from where you live.

 

For instance, living in Lagos and having a property in Lagos can sometimes be easy depending on the location. It is, however, a job when you have a property in Ogun state and you live in Lagos. Now, imagine you have multiple properties away from where you live. It can be very stressful - physically and financially. Hiring a property manager makes sense in cases like this.

 

If you are yet to own a property, you should definitely consider the proximity of the property. Check out PropertyPro.ng for a list of properties available for sale within your location.  

 

Do You Have The Time To Oversee The Property?

In making the your decision, ask yourself if you have the time to oversee the property. The truth is, being a landlord is a job on its own. There will be cases that need your attention; some of which might be urgent and also require physical presence. What are the chances that you can live your location at the moment?

 

Inasmuch as the job of a property manager is to manage your property, you can be rest assured. It is expected that enough time is put into managing your property as it is there job.

 

Can You Afford A Property Manager?

You should also assess your finances before deciding to hire a property manager. This is very important because the services they render don't come free. As mentioned earlier, they come with a fee and you definitely should know if you can afford it.

 

On the average, property managers charge between 4% and 10% of the monthly gross income of the property. Depending on the contract agreements, you can agree upon how much they charge. The fee charge for multiple properties is usually cheaper than it is for a single property.

 

Do You Have Enough Experience To Manage A Property?

There are chances that it is your first time as a property owner or landlord. Knowing what to do and when to do them can actually take time. Hiring an experienced property manager until you learn the ropes can be the right choice for you.

 

Though most people prefer to learn on the job - as they go on. You don't want to end up hiring a wrong repairman, take forever to fill a vacancy in your property. All these will one way or the other affect your potential income. Knowing how best to tackle issues also come with experience and it's not something you just come by. Therefore, it makes perfect sense if you hire an experienced property manager until you can manage the property yourself.

 

With the above tips, if you didn’t skip any of the points, you should be able to decide whether you need a property manager or not.

 

Comments (18)

Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Having a property management company handle rent & repairs relieves the headaches of working with renters. However, that piece of mind does come at a cost.

Dec 07, 2018 10:55 AM
Graziella Bruner
NCS Premier Real Estate - Detroit, MI
Associate Broker - Serving Wayne & Oakland County

I agree having a property management company is a good thing, it's less on you and more of the piece of mind, but even peace comes at a cost.  You must do your homework on everthing, you have to weigh the cost.

Dec 07, 2018 12:48 PM
MaryKay Shumway
The Kellstrom Ray Agency, Inc. (Est. 1948) - Sister Bay, WI
Door County Wisconsin's Real Estate Expert

Great blog on the pros and cons of everything from owning mulitple properties to whether or not you should hire a property manager.  Four stars.

Dec 07, 2018 12:55 PM
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

As someone who owns a property management company they can save you bacon if they are good.

Dec 07, 2018 02:54 PM
Jerry Murphy, CRS, SRES
Long Realty West Valley - Anthem, AZ
Anthem, Phoenix, and Scottsdale AZ Real Estate

I agree, if your property is too far from where you live, hire property manager.  The rule of thumb I've heard is 35 miles or more from your home.  However, most of my clients who have had property managers have not been very satisfied with them.  Good post Jesuza.

Dec 07, 2018 04:30 PM
Jon Kolsky
Kolsky Realty & Management - Long Beach, CA
Licensed California Real Estate Broker

jesuza alex ~ love your name, btw! You have laid out the perfect description of a property manager and the benefits of employment. And for absentee landlords - finding the best management company is as paramount as being smart in buying the investment as well as getting good tenants.

Here's the thing (and this applies to landlords that live near their investment).  I own and manage just over 200 units! The annual income from last years was just over $3 million. So my number would be anywhere from $120k to $300K...  

I have to figure out two things at this point. Can I do a better job than the top management? & do I like my bottom line better with $120 to $300k? 

Personally, I feel I do a better job than any management company, especially with appFolio software on my side! And I feel I do a better job because no matter how invested a management company might be, I'll always be way more invested as I care most about my properties and my business 

Dec 07, 2018 04:59 PM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

It’s always good to have an expert, a real expert the guy things no matter how good we think we are. This includes when I get too big for my britches myself

Dec 07, 2018 11:50 PM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

You make more good points and you’re winning you over more and more with this! Keep up the good blogging! :)

Dec 07, 2018 11:53 PM
Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, eXp Realty - Kalispell, MT
Helping your Montana dreams take root

I always thought it would be fun to be a property manager (except for middle of the night emergencies!). I still do after reading your post.

Thanks for the info!

Dec 08, 2018 02:50 AM
Sham Reddy CRS
H E R Realty, Dayton, OH - Dayton, OH
CRS

You need to evaluate your own situation before you hire a property manager as it increases your operatig expenses and reduces your bottom line

Dec 08, 2018 04:04 AM
Tom Bailey
Margaret Rudd & Associates Inc. - Oak Island, NC

I worked briefly as residential property manager, and I would NEVER EVER manage my own rental homes. Not even just 1. I manage 2 groups of commercial buildings my sisterand I own.  They are easy to manage. I have good tenants (both over 15 years), and the leases are triple net. 

Dec 08, 2018 05:10 AM
William Collins
ERA Queen City Realty - Scotch Plains, NJ
Property and Asset Management

Jesuza, thank you for a thought provoking post. As part of my platform of services, I provide property management. I find for most investors the property management is an after thought post closing. Atually, it should be part of the equation when conducting a cost analysis for the property. When developing a pro forma for the property we factor in management fees along with other expenses. This results in the buyer having a complete financial picture of the properties projected financial performance.

Dec 08, 2018 05:12 AM
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Good morning, jesuza alex at one time I had 23 units to manage while I was a full time agent.... I should have used a property manager....

Dec 08, 2018 07:35 AM
Lorrie Semler, REALTOR® in the Dallas area. Call/text 972-416-3417
United Real Estate - Addison, TX
Real Service. Real Results. Real Estate

I have an investor client who owns 5 properties. I wish I could convince him to use a property manager. He's forever calling me with questions and I keep telling him I can't answer under our E&O policy.

Dec 08, 2018 08:12 AM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

This is one of those things that appear easy enough and it even signals that it is when getting started. Then, the dynamics of it of make themselves known and to the trained eye it does this before hand. For those that cannot handle the lesson in the moment, it can be quite an expensive fiasco. Not wise to expose your property to this type of risk. It is well-worth it to hire a prop mgmt, pay them...and relax & enjoy the investment.

Dec 08, 2018 09:01 AM
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Jesuza,
It takes a special personality and skill set to be able to manage your own properties. A good property manager is well worth the investment. I could relate all kinds of horror stories about people who tried to do their own and it ended up costing them thousands and thousands of dollars more than hiring a professional manager.

Dec 08, 2018 09:42 AM
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hello Jesuza- - - a very well- organized post and definitely feature-worthy.  Some interesting comments too that add to the idea/spark some additional thought.

Dec 09, 2018 07:00 AM
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

I don't think I would like to be a property manager, but we have done it for ourselves when it was our own home and we were close by.

Dec 11, 2018 11:46 AM