WHY HIRE A PROFESSIONAL PROPERTY MANAGER

Why hire a Professional Property Manager

When you add up the responsibilities, there's much to be said for hiring a professional. Going this route will cost you about 10% of the monthly rent collected -- a smaller proportion for high-end properties with high rents.

Avoid companies charging less than 8%. These managers may lowball the management fee, then overcharge for maintenance or pay kickbacks to expensive contractors. Find a management company that is transparent in all their fees.

Questions that you ask when choosing a property management company:

• Exactly what services do you provide?
• What references can you give me?
• Do you offer a live 24-hour maintenance call in?
• Do you answer rental calls 24 hours a day?
• Do you have errors-and-omissions insurance (to cover negligence or mistakes)?
• How many properties do you manage?
• How long have you been in business, and do you specialize in just managing real estate?

Handling moneyNo matter who manages your property, you'll need to keep rental-business records separate from your personal accounts. That's easiest with a financial software tool like Quicken or Microsoft Money (created by the owner of MSN Real Estate). You want to see at a glance where the business stands financially and substantiate tax deductions in case of an audit.

You can deduct mortgage interest, property taxes and expenses related to the operation and rental of your unit, such as professional services (cleaning, painting, accounting, property management, yard care), supplies (paint, equipment, lumber, appliances) and travel in the service of caring for the property, says Phoenix CPA Murray Kanefsky.

Other tips:

• It's advisable to create dedicated savings and checking accounts for your rental business. If you own the property through an LLC, a separate account may be mandatory.
• If you're renting out what's been your primary residence, consider setting up automatic bill paying and not having bills or other financial papers sent to that address.
• Put monthly contributions into an account for repairs, new appliances, maintenance and taxes. "If I need a new boiler or roof, it's nice to be able to pull out $10,000 that you have set aside for that purpose," says Edwards.
• Never mingle rental income with your personal funds. Learn the law in your state about handling tenants' deposits. Some states require a special escrow account. If not, keep the money in a separate savings account. "It's extremely important that landlords -- I don't care what state you're in -- don't treat it like it's your money," says Edwards.
• If your state requires interest paid on tenants' deposits, learn how and when to calculate it, then decide if you'll pay the tenant monthly or let it accumulate until you return the deposit.

When the thrill is goneThe prospect of evicting a tenant is the nightmare hovering in the background of every new-tenant screening. Do the screening correctly and you should be safe. Still, things occasionally go wrong. If you must evict, don't do it yourself -- use an attorney who specializes in the area, Griswold advises.

Consult the attorney if a tenant gets even one month late on rent and follow the guidance you're given, since laws are quite specific about your obligations at this point and professionalism is crucial.

"The bottom line is, you have to be able to smile, take a deep breath, walk up to the individual who maybe has not paid you two months rent, be polite and friendly and treat them like a customer," Edwards says. You should have an eviction in process at this point, and you can explain that this is not personal, that you'd like to keep them as a tenant and all they need do is pay up.

If landlord duties are keeping you awake at night, if a bad tenant is taking the fun away, if you must dig deeper and deeper into your savings to support it -- that's the time to sell if you can. Rental property is a business, and if it's not a business you like, let it go and stick to work you enjoy.