Why Hiring a Property Manager Makes Sense

You’ve bought a property you want to rent out, now what? Managing property can be a full-time job, especially if you have more than one property. Are you going to learn how to do it on your own or hire someone to take care of the work for you? There are many reasons to consider outsourcing to a property management company: They have experience with what you are likely to deal with. They have access to equipment and resources, often for a better cost than you could get on your own. They take care of the time-consuming work of finding and screening tenants, showing the property, managing the maintenance issues that come up, and taking care of finances, paperwork, turn-over upkeep, and re-renting the property.

A Property Management Checklist

When you are looking at the work involved in keeping your property rented or leased, consider the following list:

• How will you attract tenants – is your rental rate comparable for the area? Will you advertise (print, social media, signs) or rely on word of mouth?
• How will you screen prospective tenants – Are they reliable?  Will they damage property, squat, pay rent on time? Do they have pets?
• Do you have a rental agreement prepared? 
• Can you do a credit or background check?
• Will you verify a tenant’s reliability with employers and previous landlords?
• Once a tenant is chosen, you will need to discuss expectations, lease agreement, payment schedule, utility transfer, when to give move-out notice, go over the move-in checklist, take pictures, collect the security deposit, and first (and last?) months rent.
• How should tenants contact you with problems?
• Where and when should the rent be paid and is there a grace period?
• You will also want to let them know what you expect at move-out as far as damage/repairs, cleaning, transferring back utilities, doing the move-out inspection, and getting a forwarding address to send the security deposit to. 

Between tenants, when there is no rent coming in, repair or replace whatever is needed, upgrade or do preventative maintenance, and start the process again. 

When Should you Hire a Property Manager?

If you have more than one rental property or unit, you may want to consider hiring someone to manage your properties.  This is especially true if you do not live close enough to the properties to easily respond to tenant issues. Are you available for needed repairs like a leaking toilet or faucet, or a broken appliance? If you are not into hands-on management, have limited time available, are not great at handyman tasks, or feel overwhelmed, hiring someone can be very cost-effective. If you hire a property management firm instead of an individual property manager (think employee), you won’t need to worry about adding payroll and benefits to your task list.

Considerations When Hiring a Property Manager

There are several things you should consider when deciding whether or not to hire someone to manage your property. How long have they been in business and are their tenants happy? Are the properties they manage similar to yours? Do they have a good reputation in the area? Do they have good credit references, accounting procedures, and administration staff? Will they keep your property rented, inspected, and well maintained? Will they manage cash flow, financial reporting, legal papers like contracts, lease agreements, tax filings, and evictions if necessary?

Costs and Fees

You can typically expect to pay for property management between 7-10% of the rent collected.  Other fees may also apply in different situations such as seasonal snow removal, so read the contract carefully. The downside to hiring a property manager is cost and loss of control. You are also at risk of legal liability if the property is mismanaged so it is wise to investigate carefully right from the start.

Should you decide a property manager is likely to be cost-effective for you, start with exploring who is available in the area where the property is located.  Carefully look into each potential candidate’s credentials and their reputation in the area. Have a list of questions ready when you interview them and review their rental/lease agreements to make sure you agree with them.

If you are looking in the Durango, Colorado area, check out The Property Manager. Established in 1988, they are a full-service manager of residential and commercial properties with a great reputation for reliable service.

Resources

• Outsource Your Rental Property Management – THE PROPERTY MANAGER (rentdurango.com)
• The Property Management Checklist Every Landlord Needs | FortuneBuilders
• When Should You Hire a Property Manager? – Modern Property Management (modernpropertymtg.com)
• Should I Hire a Property Manager? Pros, Cons & Costs (sparkrental.com)