Every situation of every landlord is different. Despite the differences, some certain scenarios and factors incline owners to look at hiring property management firms one way or another. Here are important questions to ask yourself and look over to determine if you need a property manager.
1. How far away do you live from your rental property and can you visit it regularly?
If you live close by to your property to make regular visits to oversee maintenance, inspections, rent collections, etc., then all’s fine. However, if you live further, you’ll have to travel to make sure your property is well-taken care off, but this will mean that you’ll have to make the time. And the farther you live, the higher the travel time is, as well as the expenses. The larger the distance, the more you will be tempted to not keep a close eye on your property’s matters. This can be a perfect recipe for disaster. To keep the responsibility, you’ll have to plan a monthly schedule to visit your rental properties. The disadvantage here comes when middle night emergencies occur that will require your immediate attention. In the long run, do you think this will be feasible for you?
2. Are you a person with high tolerance? How do you handle stress?
This can be a difficult question to address as we all like to think of ourselves as level-headed and stable. At the end of the day, it takes a specific kind of person to deal with the many ups and downs of property management. Behind the seemingly simple tasks like rent collections and regular property maintenance, there lie several unpredictable problems every month that can push people to their limit. Are you up for it?
Ask yourself how you would react in the unfortunate event that tenants:
- Get in conflicts with other tenants or neighbors
- Have domestic disputes
- Conduct illegal business in the residence
- Carry on all-night parties
- Try to sneak extra people or animals into the home
- Decide to sue you
- Trash the property
- Refuse to pay rent and know how to work the legal system for the maximum amount of free housing at the owner’s expense?
3. Are you overwhelmed with your properties?
Managing rental properties, especially when you have multiple of them, can be overwhelming in the long run. And this is particularly true even with those who are experienced investors. There will always be something that requires attention and it takes very little time for things to get out of hand. Hiring a property manager can allow you to regain control and restore stability to both your properties and your life in general.
4. How many rental units do you have?
As the number of your properties increase and your portfolio grows, so do the challenges in managing them. And it becomes easier for things to fall apart. Those with large portfolios stand to reap significant benefits by taking advantage of the efficiencies that a property management firm can provide. Size can also constrain investors’ ability to consider purchasing new properties if they’re already maxed out managing their current holdings.
5. Are you well-versed when it comes to maintenance and repairs?
If it’s beyond your capacity, do you know who to call? Finding reliable contractors and handymen can take a while, and in the meantime of trying to find them, you may hire unethical, uninsured, and overcharging contractors who do poor-quality work. Property maintenance and repairs are a part of the daily life and challenges of a landlord, and if you doubt your ability to ensure that the work is done well and on time, you might want to consider hiring a property manager to handle it for you.
6. How long does it take you to get your unit/s rented?
Cold calls, fielding calls, advertising, and showing units can take a considerable amount of time, but these are critical tasks to lessen the vacancy period of a unit. Vacancies will eat into your profit margins and if you question your ability to rent out your properties as quickly as possible, you should consider hiring a property management company.
7. Are you able to handle the accounting and bookkeeping for your property?
From the profit and loss statements to the tax deductions, these things will need special attention and will become an increasingly larger burden for those with larger portfolios. Some property owners will do just fine especially those with a background in finance, but others can opt to hire an accountant to help them with this portion of the work. If you feel like this is your weak point, you may want to consider hiring a property manager to help you out and make your life easier.
8. Are you willing to be on-call, any time of the day?
It’s important to be honest in answering this question because you cannot ignore it when there is going to be an emergency at your property. Any special event, vacation, important meeting, or personal crisis doesn’t relieve or excuse you from your obligation to your tenant. Although emergencies don’t happen all the time, you have to be willing to handle them immediately when they do. Are you willing to handle being called at 2 in the morning to fix your tenant’s overflowing toilet?
9. Are you willing to do confrontations to tenants when need be?
New owners dislike the feeling of being the bad guy that some even try to be understanding by making exceptions. The problem in doing that is it will only invite additional abuses and excuses from tenants. Issues like late payments must be dealt with immediately, though sometimes a friendly reminder is all that’s needed. Other times, the issue can be a very confrontational eviction. Running a successful business is unlike running a charity because it means enforcing the rules even if it means evicting a single mother who just lost her job and won’t be able to pay her overdue rent anytime soon.
10. How well do you know and understand the laws regarding land lording?
To ensure that your rental properties are running following the law, you must be knowledgable about the laws governing land-lording. This is to prevent potential lawsuits and to be able to shield yourself from liability if you are sued. Familiarity with contracts is also very important as your rental agreement is the only binding agreement between you and the tenant.
If you are a new owner or already a long-time one but are having a hard time juggling all the responsibilities that came with your multiple properties, it’s important to take a step back and assess some things that are on your plate. Maybe it’s time to hire help. Ask these questions to yourself to determine if you need a property manager.