One of the most important decisions you must make as a real estate investor is whether to hire a property manager or handle things yourself. For novice investors with a small number of units, it is possible to manage things themselves. As their business expands, however, they will need to pay for some help.
Property managers and property management companies are extremely helpful, but they do come at a price. For many real estate investors, this is something they cannot afford. Here are a few things to consider as you choose what is right for you and your business.
The duties of a property manager
Regardless of who is in charge, there are some things that must be done in the area of property management. By utilizing technology and properly setting up your rental business, you can streamline many aspects and minimize the required man-hours.
With that in mind, here are the critical tasks that are the responsibility of the property manager:
- Setting the right rental rates for the market
- Collecting and depositing monthly rents
- Marketing and advertising properties
- Interviewing potential tenants
- Dealing with maintenance workers, contractors, landscapers and other vendors
- Ensuring compliance with Fair Housing laws and other regulations
Property management company or resident manager
Unless you live on-site or very close to all your properties, you will eventually need the services of a property manager or property management company. For a property management company, you can expect to pay anywhere from 5 to 10 percent of your rent revenue.
Many factors can affect a resident apartment manager’s earnings, such as the number of units they manage, their experience, and if you pay bonuses for meeting occupancy quotas. You already know that the rental market is good, and the Bureau of Labor Statistics predicts that demand for property managers will increase by at least 8 percent in the coming years. Start your search for a qualified manager with the National Association of Residential Property Managers.
If your properties are part of an affordable housing program, you must comply with a complicated set of rules to continue receiving financial assistance from the government. In this situation, it is typically best to rely on the expertise of a property management company that has experience with your particular housing program.
A property manager should maximize the profitability or your investments and your time. Consider how much you will be paying them and how long it would take you to do the job yourself. The more units you have, the more likely it is that a property manager is worth the cost.
Related Articles:
Hiring and Managing a Multifamily On-site Property Manager
Early Warning Signs Your Property Manager Has Lost Control
Lead Your Multifamily Property Manager – Starting the Day You Close
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