There are many factors to consider when deciding if you should get a property manager. A property manager can improve your landlord experience to a great extent, but of course there is a cost: can you afford a proportion of your rental income to go a property manager? If so, then that’s the first road-block covered.
Remember costs can vary depending on the property manager. Some take a % of rent, while others prefer a fixed fee. A property manager fee calculator can assist in understanding the charges to expect.
The second layer of questioning focuses on your situation, see our 6 point guide when deciding if you need a property manager or not
You have multiple rental properties
More money, more problems… it’s the same for rental properties. If you have a couple of properties, fixing issues, finding tenants, collecting rent etc are manageable. If you extrapolate those activities over 5, 10 or even 15 properties, the workload shoots up dramatically.
Handing over some, if not all of your properties to a property manager can reduce the effort you need to commit to being a landlord. In addition, with multiple properties, a property manager is likely to offer you lower landlord fees, further enticing you to get a property manager
You live far from the property
Driving can take its toll, especially when your rental property is based busy cities where traffic is an issue. As a landlord you will have to travel to your property from time to time to fix issues, discuss changes with your tenant or chase/collect rent (if you’re not setup to do this electronically).
So weigh up petrol expenditure and time driving back & forth to your property if you don’t live close.
Many landlords get stuck in a situation where they live in a property, get a job elsewhere and have to move their residential location. Rather than selling your initial property, you stick it on rent. What might sound like a good idea at the time, may result in a lot of travelling.
One factor Rent Round shows you when comparing property managers, is how far they are located from your property. A property manager close to the property is likely not to hesitate when needing to visit, as opposed to a property manager based further away – so issues get fixed quicker.
You’re not interested in hands-on management
Some don’t like being a landlord, but like the rewards. If you don’t fancy staying on top of legal documentation, having difficult conversations with bad tenants or talking to maintenance people, a property manager is for sure a good option for you.
Even the financial industry is moving in this direction. Rather than buying & selling stocks for yourself, many individuals are now turning to funds. Companies like Nutmeg offer you a chance to put some of your money into a pot, you enter your risk profile and they do the management of the investment for you for a fee.
It’s the same for a landlord. If you don’t like the activities but like the extra income, get someone else to do the ‘dirty’ work for you.
There just isn’t enough of it. Many have busy schedules spread across day jobs, exercise, family and hobbies. People even struggle to look after the properties they live in themselves!
A property manager will reduce the amount of time you need to spend on your property.
Even if you have time, it’s probably better spent on looking for new properties, analysing the rental market or talking to suppliers to get better deals, than it is on dealing with the day to day landlord struggles.
Do you want to be an employer?
You could find someone yourself to be your property manager such as an independent person, paying them a salary. This is common when you have multiple properties, especially blocks of apartments & flats.
You will have to handle the recruitment and legal obligations such as drawing up an employment contract, pension contributions, sick pay etc. The management of the employee could become more cumbersome than managing the properties themselves!
However because a property management company isn’t your direct employee (it’s an agreement with another company) you get the benefits of your property being managed, without the hassle of employee management.
Of course having your own dedicated employee for your properties will give your portfolio more attention and focus. A property manager company will have to spread their resources across multiple landlords.
This is why picking the right property manager is vital. Rent Round allows you to compare property manager fees & ratings, best of all it’s free and takes 30 seconds.
Your tenants are part of a benefits program
If your tenants are low income households, you are likely to be receiving grants or rent donations from government credit agencies.
Recent government changes has meant that housing benefits are paid to tenants first, to be then passed on by the tenant to the landlord.
However there has been an increased trend of tenants entering rental arrears, with the benefit they receive not being passed onto landlords. Now this is a small % of low income tenants, but if you’re one of the unlucky landlords the financial repercussions can be significant.
Property managers have guaranteed rent services set up, if your tenant doesn’t pay, you still get your rental income.
You do have the opportunity to set up a guaranteed rent policy yourself with an insurance firm. However this can get confusing and you need to ensure their aren’t any major loopholes in your insurance policy. In addition you’ll need to still chase & collect the rent.