If you're a rental property owner, chances are that at some point you've considered using professional property management. You've likely reviewed the pros and cons of property management and might be wondering, “Is property management worth the cost?”
Deciding to hire a property manager can be a tough, lengthy decision, but we’re here to make it easier for you. Here are three things to consider when thinking about hiring a property manager.
Can You Do It Better?
This is something you should ask yourself as soon as you start thinking about letting someone else manage your property. If you don't have any difficulty managing your property/properties, you might not need to spend the extra money on a property management company.
Three important factors in property management are the expenses required to prepare the home for rent, the average time it will take the lease the home, and your vacancy rate. Once you look at those numbers, you can compare them to local property management companies that you’re interviewing. You might struggle to get your home leased in 30 days, but a management company can likely cut that time in half.
The vacancy rate is an important metric that can make a big difference in the profit you get from your property. If you have a part-time or full-time job in addition to managing your property, you are probably short on free time. This can result in a turnover taking 2-4 weeks, whereas a management can prepare most homes in less than a week. Vacancy costs are the biggest drain on a property owner and saving money here can make a big difference.
The Value of Time
What is your time worth? One of the most common reasons that people turn to professional property management is that they are spending too much time on the property and not enough in other areas of their life. Managing a home is a time-consuming job, especially when you are doing everything yourself.
On average, preparing a home for rent takes roughly 30 hours. This includes any needed maintenance, marketing, cleaning, leasing, etc. Ask yourself if you have the time for that, especially if you have multiple properties.
Consider what your time is worth. Maybe you want to spend more time with your family or you got a promotion at work. Maybe you just don’t want to spend so much of your time coordinating property repairs and managing tenants. Whatever it may be, this is something to think about when looking at property management companies.
Can you find a trustworthy property management company?
When looking for a good property management company, think about what your ideal situation is. Do you want to be completely hands-off and only be notified of emergency issues? Or do you want frequent updates on the home and tenants? Make sure you know this before signing a contract.
Pay attention to all aspects of their company, like how they market their properties. Do they do what they promise? Are their photos and/or videos as high quality as you want them to be? You can always look at their reviews, but it’s important to physically see the kind of work they do. What happens when you call the office? Does someone pick up, or have you not been able to speak to a real person? These kinds of things tell you what kind of company they are.
You should also check for how transparent they are on their website. Can you find the things you’re searching for? A great property management company will provide everything you want to know on their website, including fees, services, and even team biographies.
When you interview property management companies, it’s crucial to ask the right questions. We wrote a blog with the 5 essential questions you must ask a potential property management company. These questions will help prepare you for their style of management.
These are three things you should always think about when considering hiring a professional property management company. In our experience, the benefits of property management are worth the nominal fees they charge.