Have you been unable to come up with a decision on whether you should be hiring a property management company or not? We know very well that as a landlord, hiring a property management company is one of the biggest decisions you are to make, so it’s totally alright to carefully think it over.
A lot of landlords decide to manage their properties on their own, sometimes with the help of an employee. But on certain occasions, landlords need more help. This is where hiring a property management company should be considered.
What does a property management company do?
Property management companies are independent contractors that deal directly with prospects and tenants. Hiring a property management company saves you time and worry over marketing your rental properties, collecting rent payments, even handling repair and maintenance work. The company will also deal with tenant complaints and they even manage tenant evictions.
When should you hire a property management company?
It’s undeniable that hiring a property management company can be very convenient and comes with a lot of advantages. However, the most common reason why landlords decide not to hire one is that it can be expensive. To help you decide whether or not to hire one, below are some factors that you should consider during your decision-making.
You have numerous properties or rental units.
Handling numerous properties and rental units requires a serious commitment. So if you do have lots of it, you would certainly benefit from a property management company.
You reside far from your rental properties.
Hiring a property management company if you’re living far from your rental properties can actually be invaluable for your business. They can deal with a lot of issues that you may not be able to handle from afar.
Issues like major emergency repairs are tough to coordinate over long distances. Top local property management companies either have their own in-house repair crews, or they know who the top contractors in the local area are based on quality and affordability.
You are unable or uninterested in hands-on management.
Many landlords are up to the challenge of finding good tenants and personally handling the day to day management activities their business entails. However, if you view your properties as a pure investment and you don’t want to be involved with the management and anything in between, then hiring a property management company should be able to help you.
This also applies if you don’t have the time to personally manage your properties or is more interested in growing your business like looking for more properties or changing your business structure.
You can afford the cost of hiring a property management company.
As mentioned initially, hiring a property management company can be expensive. Quotes range from 10% to 15% of the rent collection revenue. Before hiring one, be sure to do the math if your business can afford the cost.
Your business is growing.
A growing business is sure to come with more management tasks. If you find yourself struggling to properly manage your properties, then you should consider hiring a property management company to lessen the burden.
You don’t want to manage employees.
Landlords who don’t hire property management companies, usually hire a resident manager or other employees to help him or her with the property, which means they become an employer. As an employer, you need to handle or outsource things like payroll and all other legal requirements. On the other hand, if you hire a property management company, you need not deal with any of those because you’re hiring an independent contractor.
You own a property that is part of an affordable housing program.
Handling a property that is part of a housing program can be complicated. Generally, landlords who participate in these programs receive financial assistance like a grant, low-interest loans, or tax credits. But in order for them to continue receiving the assistance, landlords are required to comply with a complicated set of rules. Having said that, it’s often more rational to hire a property management company to deal with all the needed requirements.
We hope you find the above useful on your decision-making. Good luck!
Continental Realty is a property management company located in Birmingham Alabama. Give us a call if you need help managing properties in Jefferson or Shelby County.