Do I need a property manager as a landlord?
There are all sorts of reasons why people become landlords. Some people are in the property development game as a career, aiming to build up a portfolio of properties and working full time managing tenants and investments. Most landlords are juggling a rental property with a job or family though. If you’re the landlord of a rental property or two then taking on a property manager can be tempting. But there are both advantages and disadvantages to doing so.
Advantages of using property managers
One of the best reasons for using a property manager is when you are living a long distance away. It makes sense to have someone local to vet prospective tenants, perform pre-rental checks, deal with repair issues and collect the rent when it would be inconvenient for you to do so. Also, if you are very busy at work or with family, this might not free up much time to deal with issues around your rental property. This is especially relevant to people who work shifts and might not be able to respond immediately to tenants. Property managers will have a trusted network of tradesman who they work with. They will instantly know who to call for roofing repairs, a broken boiler or some electrical work. Property managers also deal with the legal aspects of running a rental property, such as making sure yearly gas inspections are done, or drawing up legal tenancy agreements.
Disadvantages of using property managers
The main disadvantage to using a property manager is the cost. Most managers work on a percentage fee basis, calculated from the monthly rent. Around 5% to 10% is standard. This fee will cover the manager’s services as first point of contact for your tenants, and for doing things like marketing the property or inspecting it after tenants move out. It usually doesn’t cover any additional costs for maintenance and repairs, which are invoiced separately. The other main disadvantage is that property managers vary hugely in quality. Some are great, others are sorely lacking. You can’t expect that a third party will have emotional attachment to your property in the same way as an owner will. It’s always best to talk to other landlords locally to find out which property management company has the best reputation with your type of property.
Dealing with property managers
Always go to see property managers in person before signing up to their services. The personal relationship is important, especially when things go wrong with a tenancy. Ensure you can get hold of your property manager using email or text message, especially if you live many miles away. Ask them for details of how long they have been operating, what sort of services they provide and for testimonials from happy customers. The lowest monthly fee isn’t always the best way to decide on which property manager to use. It might be best to pay a little bit more every month for peace of mind and a superior service.
