Investing in real estate is an effective method of building wealth and expanding your estate. Despite the many benefits derived from real estate investments, maintaining the property requires ample amounts of time and attention. If you invest in a rental property, you may be tasked with searching for the right tenants, collecting rent payments, and making sure that the building is properly maintained. If you don't have the time to manage your own property, you could hire a property manager to take care of these tasks for you.
What Are Property Managers?
Property managers are people or companies you can hire to manage the investment property that you've purchased. Hiring a property manager is typically reserved for apartment complexes and similar multi-unit buildings.
If you want to put your money into an investment property but don't necessarily want to manage the property on your own, you would likely benefit from hiring a property manager. The person or company you hire for the job will act on your behalf while managing the investment. As this entity manages your property, you will be able to generate income.
Why You Should Consider Hiring a Property Manager for Your Rental Property
There are several reasons why you should think about hiring a property manager. As mentioned previously, hiring a property manager gives you the opportunity to act as a passive investor. This option is also ideal for investors who own rental properties in other areas or states. If you find yourself in this situation, it may be difficult for you to access the property directly, which is when hiring a property manager would be beneficial.
Main Property Manager Responsibilities
There are many tasks and responsibilities that a property manager has. For instance, the property manager must adhere to all of the tenant-landlord laws that exist in the area where the rental property is located. When you hire a local property manager, they will already be familiar with these laws, which makes it easier for them to avoid legal issues. The property manager you hire will also:
- Identify the rental price the units should be listed at
- Clean and prepare any vacant units
- Market rental vacancies
- Perform comprehensive screening on potential tenants before approving new tenants
- Manage tenant issues and complaints
- Adjust and collect rent
- Perform repairs and maintenance to keep the property in good condition
- Handle evictions when needed
- File all property taxes
- Keep extensive records of property finances and growth
Pros and Cons of Hiring a Property Manager
Hiring a property manager for your rental property is a decision that comes with numerous benefits and drawbacks. The type of role you would like to have with your real estate investments will dictate if a property manager is needed. The primary benefits that come with hiring a property manager include:
- You won't be responsible for maintaining the property
- Helpful if you've invested in multiple properties or properties that are out-of-state
- You can be a passive investor
The few issues with hiring a property manager include:
- Property management costs can be high
- You won't have direct control over the property
- Screening process for new tenants may not be up to your standards
If you decide to hire a property manager, you'll immediately benefit from being able to generate returns from your investment without needing to directly manage the property. Hiring an experienced property manager can help you get the most out of your investment and will minimize mistakes.
This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation.