2/17/2018 By Paul Arrington
Are you thinking about hiring a property manager? Are you a real estate investor? Are you moving and don’t want to sell your home? Are you relocating and need someone to look after your home? Have you ever managed a rental property before? Do you know how much time it takes to manage a rental property?
I ask all of these questions to get you thinking about what your particular situation is and what you need from a property manager. For instance, if you are moving out of the area it will be next to impossible to manage your property from far away because someone really needs to be able to “put eyes on the target” quickly when the need arises. Also, if you have a full-time job and family, the last thing you want to do is deal with tenants and their issues. For these reasons, you will most likely want full-service property management to handle all aspects of managing the property. If you are an investor and investing in property as part of your wealth building strategy or are planning to live near the property, you may only want limited services like marketing the property and tenant screening.
When hiring a property manager, be sure to check them out thoroughly, and I don’t mean just look at their Google reviews! Make sure they are licensed. In Florida, a property manager must be a licensed real estate agent. Look to see what certifications they have. Are they a member of the National Association of Residential Property Managers® (NARPM)? Members of NARPM adhere to a strict Code of Ethics and take many classes and educational seminars to increase their knowledge. Do they hold any designations such as the Master Property Manager® (MPM) or Residential Management Professional®(RMP)? This shows they are dedicated to being the best property manager possible. All of these things should be important to you because, after all, they are going to be managing one for largest assets you own!
PROS OF HIRING A PROPERTY MANAGER FOR YOUR RENTAL
- Pricing the property correctly. Too high and it will sit on the market, too low and you may not be getting what it is really worth.
- Marketing the property to find a tenant. You want to make sure they know where your future tenants are looking for their next home.
- Screening the applicant. This is, in my opinion, is the most important thing in successfully managing a property. The background check must be thorough to include credit & payment history, eviction history, criminal history, sexual predator history and even checking against the terrorist database. But, they must also know the laws and rules such as Fair Housing, Lead-based Paint Hazards and the difference between a pet and a service/emotional support animal.
- Leasing the property. A good property manager will have an attorney provided lease and will have established relationships with lawyers specializing in landlord-tenant law for when things go south…and they sometimes do.
- Rent collection. Seasoned property managers have a rent collection policy and procedure so that if your tenant is late paying the rent you know about it, and you know what steps are going to take place and when.
- Property maintenance. A good property manager has properly licensed and insured trades that they have signed agreements with to take care of your maintenance needs.
CONS OF HIRING A PROPERTY MANAGER FOR YOUR RENTAL
- Cost. Property managers cost money just like your investment manager or your business manager. Most property managers charge a management fee anywhere from 8-10%, leasing fee from 50-100% and other charges such as a property set up, advanced marketing, maintenance coordination, etc. Keep in mind; many property management charges are negotiable.
- Less Control. You will not be in control of the daily operation of your property. If you want to direct and control every detail then hiring a property manager may not be for you.
- Legal Compliance. Property managers must follow the laws and rules of property management so they will probably not look the other way when you tell them to not rent to certain people or not to repair something that is broken. Keep in mind though, landlord/tenant laws apply to you also when you are renting your property.
Hopefully, the information I have provided will help you decide whether or not hiring a professional property manager is the right thing for you and your situation.