The most important decision you will make regarding your rental property is who will take care of it. You can have the best property with the best numbers, but if you dedicate too much of your time taking care of it, your overall business will suffer. Many first time landlords assume that all they need to do is find good tenants and the property will run itself. As they will soon find out, there are many unforeseen problems that will come up at the best properties and with the best tenants. These are the problems that a good property manager can fix, but it comes at a cost. You must budget for a property manager accordingly.
Having a property manager take care of the everyday issues with your rental property will open up more time for you to focus on getting new deals and running your business. Even if you have only one property and think you can take care of it yourself, you will eventually be forced to choose between your primary employment and taking care of the property. The easy choice would be to hire a property manager and be done with it. The obvious issue is that property managers need to be paid. If there is not enough cash flow to support this, it doesn’t make sense. On properties where there is a surplus, you need to ask yourself what is your time worth to you and if you can justify the hiring.
Many new landlords fall into the trap in thinking that if you updated the property you won’t have anything to worry about. Items such as lawn maintenance, snow removal, rent collection and everyday issues still require time and attention. You may go a month or two without hearing from your tenant, but then you may be needed twice in a week. Your tenant requests may seem minor and insignificant to you, but these are important to them. If you continue to delay or ignore these requests over time, your tenants will start to feel slighted and sending the rent on time or at all won’t be as important.
Even if you have handyman experience, there will be plenty of items that are out of your comfort zone that a property manager can handle. Instead of getting a text in the middle of the night and spending the next morning dealing with a clogged toilet, your property manager will be able to handle it for you. If you look at your property as a long term hold and something you would like to keep for years, a property manager will pay for themselves in just a few short months. Instead of wasting excess cash flow on a myriad of unrelated expenses, you can put this money to good use and employ the services of someone who will protect your property investment.
Every situation must be evaluated differently. Whether or not it makes sense for you is dependent on the strategy you implement and the property itself. The bigger your portfolio gets, the greater the need for help. Many times, sacrificing a little less money every month makes sense if you look at the big picture.