8 Reasons to Hire a Property Manager! (HINT: More $$$$)

[Nick Mertens]

1. No more midnight maintenance calls. Do you know how to fix a leaky sink or what the cost of a furnace replacement should be? What about fixing a clogged toilet at 1am? Do you have vendors that give discounts on services like these?

2. No more vetting and placing new renters into your property. Do you know what you are doing? How do you vet them? Have you talked to their last couple of landlords? Do they have sufficient income to be able to handle the rent? What about credit? Criminal record? Prior evictions? Do you know how to read or order a background check? Are you just going by your gut feeling?

3. No collection woes, instead mailbox money for you. How do you collect from a tenant that has not paid rent? How do you handle evictions?

4. No legal headaches. What are you legally responsible for? Good property managers are experts on legal issues – Getting sued, fair housing, timelines (doing repairs quickly, serving notices), mold, flooding, sewage, fire, harassment, money disputes, security deposit disputes, etc.

5. No more analyzing market reports. Are you charging the appropriate rent? What is market rent?

6. No more emotional rollercoaster. A good property manager will treat it as a business, and not as a charity. What happens when a tenant calls you stating they got fired, their mom died, they have cancer and can’t pay? There is a fine balance between being empathetic but also making sure you don’t go in the red. Are you going to be able to pay your mortgage if their situation doesn’t allow you to collect rent?

7. No marketing/vacancy anxiety. How/where to market your property? Vacancy is your biggest expense. Successfully marketing your property so that it doesn’t have any vacancy is key to making profit.

8. Most importantly, no wasting your time. What is your time worth? $15/hour to deal with tenants? $30/hr to deal with tenants? More?

It might seem like a larger expense up front, but in my experience, with the right property management team, you'll have less vacancy, save money on maintenance/turns, and most importantly save yourself time/headaches. Hard to put a true price tag on that last one. 

[JD Martin]

That's a good post, but you should probably edit your title to "8 reasons to hire a good, competent, honest property manager", because I could make this same post in bizarro terms, i.e. "8 reasons not to hire a property manager (hint: less $$$)", to wit:

1. Midnight calls rarely happen, and PMs that don't have handymen on staff are going to call and bill the same kind of people you would bill, sometimes for exorbitant prices.

2. Many property managers vet prospective tenants by checking for a pulse and a wallet. Further, many never follow up on the tenancy to see if the tenants are abiding by the lease and keeping the place in good condition.

3. A tenant that's not going to pay is not going to be more likely to pay a PM than the landlord. Some PM companies are ridiculously lax about going after non-pays, especially if they have more tenants than can be reasonably handled.

4. Lawsuits of any kind are rare. 

5. Even if you are charging 10% higher than market rates, you're not seeing it, as the PM company is skimming that 10% right off the bat.

6. OK, I will give you this one :) 

7. Lots of PMs use nothing more than the sample channels a DIY landlord can use - Zillow, Craigslist, sign, whatever. Marketing is hard work and time consuming, and PM'ing is often nothing more than a numbers game - i.e., if you have 100 listings 1 is bound to get rented.

8. PM companies often have a vested interest in turnover, as they will take a chunk/all of the first month's rent as "payment" for finding new tenants.

I don't want to seem down on PM as an idea, only that it's no panacea. Lots of PM companies are pathetically lazy and do little to nothing to earn their money.