Switching to Property Management Company

[Sid DiVincent]

Hi There! I'm not completely new to the Bigger Pockets community but I'm making the commitment to put myself out there more. Last July my wife and I moved out of our first home and turned it into a rental property. Up to this point we've managed it on our own, but we are entering waters we don't fully understand how to manage. Both of us work full time jobs (50+ hours/week). The first 3 months went perfectly fine and we were clearing nearly $700/month. Smooth sailing. Then, things started to get hairy. The tenant started getting VERY behind on rent payments. He would eventually pay, inclusive of all late fees. However, we've gotten to the point where he is nearly $2,000 delinquent due to returned payments. We honestly do not currently have the time/bandwidth to keep chasing this tenant down. I'm starting to think we are in over our heads, so I reached out to a local, trusted property management company through a friend of mine. I was immediately put at ease with how they would take everything off of our hands. Then, after reading their contract this morning and running the numbers, we will go from netting $700/month to $400/month. This is taking into account all fees (listing, leasing, etc). This does not account for any turnover/make ready costs. For anyone that has switched from self managing to a property management company...was the peace of mind worth it? Is this "peanut" profits for a single family home once including a property mgmt company? I'm trying to keep the mindset that we are paid these "peanuts" to wait for the right time to do a cash out refi. Our goal/strategy is to eventually do a cash out refi on that property so we can invest in our next one. Any thoughts/feedback are appreciated. Thanks!