It’s not every day that you hear a property manager suggest that it’s sometimes a bad idea to hire a property manager. You’re more likely to have one try to put you in a headlock and force a pen into your hand, so you can “Sign on the dotted line” (I’m kidding, but just barely).
The truth is, it usually does make sense to hire a professional property manager to manage your residential rentals — especially if you live more than a 40-minute drive from your property — but perhaps 20% of the time hiring a property management company doesn’t make good sense. Let’s take a look at some exceptions.
When Hiring a Property Manager Doesn’t Make Sense
Let’s say you are a retired handyman with experience in plumbing, electrical, landscaping, woodworking, painting, dry-walling, and cleaning, you live across the street from your property, and you don’t mind tenants having personal access to your cell-phone number, so that they can call you any time of the day or night, 365-days a year.
If that sounds like you, then you definitely don’t need to hire a professional property manager.
A bit of an exaggeration perhaps, but the gist rings true. If you live close, know what you are doing when it comes to repairs, and don’t care if tenants have unlimited access to your time (and you don’t mind personally taking on the legal liability for the consequences of your direct interactions with the tenants) then you should consider self-managing your rentals.
Or, perhaps you’ve built your residential rental property investment portfolio to the point where it makes financial sense to hire a team of tradesmen, bookkeepers, leasing assistants, etc., then you don’t necessarily need to hire a professional property management company if you are willing to take on the burden yourself. At that point, you have decided to become a professional property management business with yourself as your sole client.
When Hiring a Property Manager Makes Absolute Sense
For the 98% of investment property owners who own fewer than twenty residential rentals, the smart choice is to hire a professional property management company to take over the day-to-day details of managing the properties. Some benefits include:
- Your time is yours — no tenant calls and no confrontational discussions.
- Better service than you are personally equipped to give — you leave it to the people who deal with “tenants and toilets” all-day, every day.
- Tax benefits — repairs, management fees, leasing fees, and capital improvements become deductible/depreciable on your tax-returns (check with your tax advisor for details).
- Monthly, professional financial statements and reporting — always know the status of your investments.
A good property manager will ease the burden of rental property ownership by dealing with all of the day-to-day tenant and maintenance issues, rent collection, bookkeeping, inspections, lawn-care, pool-care, posting of notices — the myriad of tasks and activities that most people never stop to consider. And the thing is, it never ends! Property management is a twenty-four hour a day, seven days a week, three-hundred and sixty-five day a year responsibility that does not stop for vacations, birthdays, holidays, weddings, graduations, or anything else.
But, I Can Save Money If I Do It Myself
True, if your time is worth nothing to you.
Strangely, I have never heard anyone say, “I am going to take out my appendix so I can save money on a doctor.” On the property sale side, the vast majority of buyers and sellers use a professional real estate agent to facilitate their transaction, because they know that there is value in having an experienced practitioner working on their behalf. So then, why is it that once they purchase a property, these same people who rationally hired an expert to guide them through the purchase process suddenly lose that same logical perspective and endeavor to take on property management themselves?
One thing that almost nobody stops to consider when contemplating self-management is the almost crushing load of legal duties imposed by federal, state, county, and municipal governments regarding housing and tenancy issues. Professional property managers attend regular training through N.A.R.P.M. and elsewhere, which allows them to keep abreast of current legal issues affecting the property management industry so that they can more effectively guide their clients in steering clear of potential legal landmines.
Hiring a property manager isn’t always a smart investment — especially if you have the time, inclination, and expertise to deal with tenants and maintenance issues on a daily basis. On the other hand, some people don’t want to deal with it, and they’re more than happy to have a professional handle all of the details and send them a rent check every month. It all boils down to personal preference.
Your Next Step
If you are one of those who either can’t, or won’t deal with the day to day drama of working with tenants, toilets, and all of the things that go with it, then perhaps hiring a property manager is the way to go. Feel free to contact me here, visit our Real Property Management of Sarasota & Manatee website, or call 941-216-0005.
Download our free ebook, “Your Guide to Finding the Best Sarasota Area Property Manager.”
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