Should I hire a property manager for my rental?
I get asked this question more than I ever would have thought. One scenario I see a lot is two people getting married, buying a larger house, and keeping an old condo as a rental. When they find out I own rentals they nervously ask if they should hire a property manager.
I have managed my own rental properties for over 13 years now. I have several rental properties out of state for which I have a property manager.
When I first decided to invest in real estate, I read several books on managing properties (Landlording by Leigh Robinson is superb). I also watched and asked questions in a popular online forum for landlords. With all this research I felt I understood the basic risks, red flags, etc. I followed all the suggestions closely and have always felt comfortable managing my own properties. I have also seen a lot of red flags that I was warned about in the books and I’m pretty sure I dodged some big problems because I knew what to watch out for.
When people ask me whether they should hire a property manager I generally tell them that if they want to do a lot of research and actively stay involved with the whole process (pre-screening tenants, serving notices, etc) then by all means go for it. However, the reality is that most people don’t want to deal with all that and they would be better off paying 10% of rent to a property manager. In the grand scheme of things paying 10% of your rent so that you can rest easier at night is well worth it.
I mentioned earlier that I use a property manager for my out-of-state rentals. I believe in the case of out-of-state rentals the fee of 10% is absolutely worth it. I knew a landlord once who managed out-of-state tenants and once in a while would fly to the state to deal with his property. I don’t see how that would ever make financial sense.