Do I need to hire a property management company?

Question

We will be relocating to Ohio from Florida and are interested in renting our home in Florida. I have talked to several different PM companies in the area and I am now wondering, do I really need a PM company. From what I could gather it seems like the only benefit to using a PM is that they help find qualified tenants for the property. All companies want to charge 10% per month and keep the 1st months rent as a finders fee. Some will take care of any repairs under $200 automatically, which I do not like the idea of, and others will call me with any issues that may come up. I have my own handyman that I can use for any issues that may arise. With that being said I am struggling with the idea of hiring a PM instead of doing it myself. I am looking for any tips/bits of advice that any experts out there may have. Thank you in advance- Adam

Adam Bartomeo · Answer

I have one rental out of state and the rest are within driving distance. The one that is out of state is a nightmare because of the difficulties of managing from a far. Luckily my in-laws live there and have been able to address most of the issues that have arisen. If they weren't there I would have sold the property for a loss or rented for a loss.

If you have a very trusted person locally to shown the property, meet the tenants, qualify repairs and contractors then do it your self.

If you don't have this person then pay for some help. Your PM is the most VITAL person on your team. This is why my wife does it!

Jeff Tumbarello · Answer

You can hire a brokerage to rent your unit and then manage yourself. I have clients and friends that do that. If you get overwhelmed, you can always hire a manager. If you are going to manage yourself, make sure you have your vendors ready to go and screened.

MarZia RiVera · Answer

Hello @Adam

How is everything working out with your rental property?

I would like to clarify a few things within this feed.  First off in the State of Florida has laws for in licensed activity, if you the owner, are not available to personally walk the prospective tenant through your property NO ONE with out an active Real Estate license may do so and get paid. By paying someone or working out a deal, that person is practicing Real Estate without a license committing a felony.

Second you don't need a property manager to place a tenant only then self manage.  As stated above you can contact several agents offering a fee to place a tenant for you.  Keep in mind by using multiple agents you can not expect all advertise your property.  If they are a REALTOR, the board requires all properties  advertised be listed in the mls UNLESS the owner specified in listing agreement and additional form not to. This curtailes pocket listing, which still prohibits you from "listing" with multiple REALTORS but not from providing you own advertisement to them to show your property. That's part of the self managing.

Third a property management company should be flexible to work for the owners needs and requirements if they are not they may not be the company for you. Everything is negotiable rather then first ask what the management company does or offer tell them what you need and ask if they can provide. You move through interviews quickly without eating your time. You know what you need you just need to find those that can accommodate them.

Last but not least most PM are also licensed agents and if they are not they can only offer limited services to you as they are requiring a Broker to list, market, advertise, show, negotiate and lease the property otherwise they are practicing RE without a license. Be careful if that, I  am not an attorney but using an un licensed person to show and get the lease sign could possibly void that lease when issues arise.  I am a Broker REALTOR and Property Manager in SW Florida if anyone needs assistant with anything pertaining to residential Real Estate sales, management, placement, and home watch.   I accommodate to the needs of the owner.

Donald Morrison · Answer

I am reading people's points and there are many assumptions being made:

1st, you don't need a property manager to rent your house, any brokerage will do. In fact, pick three, give them all keys (or the code to a lockbox).

Is the going rate is X then regardless how much you dislike it or people on BP talk about it the going rate is the going rate.

I have never heard of a company taking care of repairs under X amount, if it is legitimate then this is the business model: you overpay on your monthly and underpay on the small stuff.

If you aren't comfortable with someone else running your property then sell.

If you don't have to sell to relocate this isn't your biggest problem. The question is, do you want to go back to this place.

Eva Salas · Answer

one thought is to hire a PM expressly to rent your home to a qualified tenant and then u take it from there, verifying for yourself that your new residents are in deed well qualified!!    Your  handyman can go by there a couple of times a year, in addition to repairs, to change batteries in smoke and CO2 detectors, and just as important, report back to you anything he sees that might be amiss.   Having said all that, I personally would only use this model if I were local.

Jake Johnson · Answer

@Adam  Halsey

The problem that I see is that you will need someone to show the property for you.  If you have a handyman you trust, then I would work out a deal with him to show the property to prospective tenants after you have screened them.

I am a few years into this and I self manage my properties.  I have never had a problem getting tenants from Craigslist.  I have tried using a PM company to find tenants a couple of times with a 50/50 success rate.  That could be another option for you, just pay the PM company the first month's rent to find a tenant and have your handyman take care of repairs after that.

Good luck.

Joel Owens · Answer

Are you wanting to charge top market rent or below market??

If you rent it for below market the tenant likely will not make many waves and will pay because they can't find that deal anywhere. Now of course you need to screen them properly before moving in.

If your charging top market rents your property will have to be amazing to keep a tenant from turning over. Unless your market is really short on rentals and then you can be more demanding and only pick from a large selection of tenants.

Steve K. · Answer

@Adam  Halsey My recommendation is for the first year or first six months, use a reputable property management company.  A reputable management company will have a written lease agreement, which is essential for good management and in some states, required by state law.  Ask the property management company to keep track of service calls to see the frequency of repairs.  If your property requires frequent service or repair calls, then having a  property management company is essential unless you already know how to self manage remotely.  Also ask for a copy of the rental lease agreement, which you can use as a basis of your own rental lease agreement if you want to self manage in the future.

Think of property management fee as a "tuition".  :-)

Jennifer Lee · Answer

i manage mine on my own I'm in PA now.

My Boston condo has in-house maintenance :)

My NC commercial, I did for 3 yrs, but quickly lost my infrastructure because I am not there. I ended up selling it.

I haven't used a management company, yet

Email, google is helpful.

I would suggest keeping tabs on ppl in FL (friend/family) and touch base with your handyman. Make sure they are around.