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Is Property Management Worth it?

If you’re thinking about hiring a property management company, you might be wondering if they are worth the cost. We’re here to answer that question.

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.

Olivia

Content Marketing Manager at Good Life Property Management

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Tagged hiring a property manager landlord tips

If you own a rental property, at some point you’ve considered property management. But if you like many of us, you’ve asked yourself, is property management even worth it? I’m going to give you three things to consider before you make the decision to hire a property manager. Number one, can you do it better yourself? This is an honest question that you should consider before making a decision. Look at the three most important factors in property management, the average time and cost to make the property ready, the average time to lease the property and your vacancy rate. Compare those numbers of yours to other managers that you can call an interview or have come to your house and see where you stack up. There’s a lot more to consider than just the management fee, of course. If your time only allows you to turn over a property in, let’s say, a month and a manager can do it in two weeks, then the fee is going to be well worth it. Whereas if you live near the property and you can turn the property over quickly and you have experience with renting the property so you know how to market it, then you might actually have equal or even better numbers than local management companies. A good property management company should get you better results. So if you feel really confident in doing it yourself, then you may be a good candidate to manage your own property. Number two is consider the time value of money. What is your time worth and how much do you make per hour is it worth it to hire a manager or do it yourself. Most people consider this but you know do an easy calculation. It takes about 30 hours on average to make a property ready. So from the time the tenant moves out, you do the maintenance, the marketing, the leasing, it’s take you about 30 hours give or take. So make that calculation but also factor in number one the opportunity cost of your time. Whenever you spend an hour, you can’t get that hour back doing something else with family or friends or working on another project. Also property management fees are tax deductible. So if you’re in the 30% tax bracket plus state tax, let’s say 40% make sure you take $40 off that $100 in California at least when you’re considering the time value of your money. And lastly number three, and the most important, can you find a property management company you can trust? There’s lots of management companies out there but there’s not a lot that you can trust or that you feel comfortable with. So the easiest way to do this is think about what is your ideal scenario. Picture like the first year with your management company. What do they look like when they come out, what marketing material do they have? How do they pick up the phone? How often do they update you? What does their updates look like? Do you have one point of contact? Do you have multiple? What is the ideal scenario look like for you? Because some owners want to be very hands-off, not be bothered and just get good results. Some owners need to be walked through the process more carefully. So determine what that looks like for you and when you interview property managers just tell them this is what I’m looking for. And a good manager, if they’re not a good fit, will tell you, hey, I’m not a good fit for what you’re looking for but I can refer you to someone. So really get clear on what you want that to look like. And if you’re unsure and new to land loading, download our How to Higher Property Manager Guide. It’s a comprehensive guide that will give you a lot of things to think about when hiring a property manager or even deciding if it’s worth it for you. Thank you for watching this video. If we can help you in any way, please contact our office and as always make it a great day. Thank you.