Managing rental properties can be both rewarding and overwhelming. Whether you’re a first-time landlord or an experienced investor, you may wonder if hiring a property manager is the right move. A property manager can take much of the workload off your shoulders, but it’s not a one-size-fits-all solution.
This post dives deep into the pros and cons of hiring a property manager so you can make an informed decision about whether it’s the best fit for your rental business.
What Does a Property Manager Do?
Before weighing the advantages and disadvantages, it’s important to understand what a property manager does.
A property manager handles the day-to-day operations of managing rental properties. Their duties often include tasks like:
- Advertising and marketing your rental property
- Screening and selecting tenants
- Collecting rent and tracking payments
- Coordinating maintenance and repairs
- Handling tenant complaints and disputes
- Ensuring compliance with local rental laws and regulations
Hiring a property manager means you’ll step back from the day-to-day grind, but you’ll also entrust someone else with managing one of your most valuable investments.
The Pros of Hiring a Property Manager
1. Time Savings
Managing a rental property can be time-consuming, especially if you own multiple units or properties. From handling tenant inquiries to coordinating repairs, these tasks can pile up and eat into your time. A property manager can take over these responsibilities, freeing you up to focus on other priorities—whether that’s expanding your real estate portfolio or spending more time with family.
2. Expert Tenant Screening
Finding reliable tenants is critical to maintaining a successful rental property. Experienced property managers have robust screening processes to identify tenants who are likely to pay rent on time, maintain the property, and adhere to lease agreements. This reduces the risk of tenant-related issues such as missed payments or property damage.
3. Efficient Rent Collection
Collecting rent can sometimes feel like chasing payments. Property managers act as a buffer between you and your tenants, ensuring rent is collected on time and handling late payment follow-ups. With their systems in place, you can expect more consistent cash flow.
4. Knowledge of Local Laws
Navigating local, state, and federal rental laws can be complicated. A property manager is well-versed in landlord-tenant regulations, helping you avoid legal missteps.
From creating lease agreements to managing evictions, their expertise can protect you from costly legal disputes.
5. Maintenance and Repair Coordination
Maintenance challenges are an unavoidable part of rental management. An experienced property manager brings immense value by leveraging a reliable network of trusted contractors and vendors to address repairs promptly and cost-effectively. This expertise is especially beneficial if you live far from your rental property or lack the experience to manage repairs yourself.
6. Reduced Tenant Turnover
Happy tenants are more likely to renew their leases. Property managers ensure that tenants feel valued by responding promptly to complaints, maintaining the property, and creating a smooth rental experience. Lower tenant turnover means fewer vacancies and reduced costs for finding new renters.
7. Stress Reduction
For many landlords, the biggest advantage of hiring a property manager is peace of mind. By delegating the daily challenges of property management, you can breathe easier knowing your investment is in capable hands.
The Cons of Hiring a Property Manager
1. Additional Costs
Property managers provide valuable services, but they don’t come free. So, what do property management fees typically cost? On average, managers charge 8% to 12% of the monthly rent as their fee. While this may seem manageable, it can significantly impact your rental income, especially if you own multiple properties or operate with narrow profit margins.
2. Less Control
When you hire a property manager, you’re giving up direct control of your property’s day-to-day operations. While this delegation can be freeing, it also means that decisions about tenants, repairs, and rent collection are no longer entirely in your hands.
3. Variable Quality
Not all property managers are created equal. Hiring the wrong property manager can lead to mismanaged repairs, poor tenant relations, and even legal issues. It’s essential to thoroughly vet property managers for experience, references, and industry certifications.
4. Reliance on Third Parties
If the property manager isn’t proactive or communicative, you might find yourself chasing updates or stepping in to resolve issues.
This can defeat the point of hiring a property manager in the first place.
5. Potential Communication Breakdowns
Property managers act as intermediaries between landlords and tenants, which can sometimes lead to communication gaps. For example, if tenants raise a maintenance issue that isn’t relayed to you on time, you might face delays in solving the problem.
6. Difficulty of Finding the Right Manager
Finding a licensed, reliable property manager is no small task. It requires time, research, and interviews to ensure the individual or company aligns with your goals as a property owner.
Do You Really Need a Property Manager?
Whether you need a property manager depends on your individual circumstances. Ask yourself the following questions to determine if hiring one is the right decision for you:
- How many properties do you own?
- Do you live near your rental properties?
- Are you familiar with landlord-tenant laws?
- Do you have the time and energy to manage tenants and property maintenance?
- Are you comfortable delegating tasks to a third party?
If you’re a hands-on landlord with only one or two properties, you may find self-management to be a cost-effective option. However, if you own multiple properties, live far from your rentals, or simply value your time, a property manager can be an invaluable asset.
Final Thoughts—Making the Right Choice for Your Property
Hiring a property manager can be a game-changer for the right landlord. Their ability to streamline operations, handle difficult situations, and free up your time is hard to ignore. However, it’s important to weigh those benefits against the costs and potential drawbacks.
Before making a decision, assess your specific needs, interview multiple property managers, and verify their qualifications and track records. With the right choice, a property manager can help you maximize your investment’s potential while reducing your stress.
