If you’re renting out the basement of the house you live in and that’s the only rental in your portfolio, it’s safe to say you don’t need the help of a property management company. But, there are plenty of other circumstances where it might be worth paying a company a slice of the rent revenue you collect to help manage your property.
First, a primer for newbie landlords. Property management companies can provide a wide range of tasks, such as collecting rent, handling maintenance projects and repairs, and responding to tenant complaints. They also may help with moving tenants into your property and performing move-out checks, as well as collecting any outstanding debts and helping with eviction procedures. Combined with Roomdock, used to market your property, hiring a property management company could allow you to be fairly hands-off, with your rental serving as an easy investment.
But before you sign up with a property management company, here are some things to consider.
Is the cost worth it? It’s a good idea to get a few quotes from property management companies to gauge how much of an expense this will be. But what we can tell you is that most companies charge somewhere between 8 to 12 percent of the rent you collect each month, according to All Property Management. Other companies may charge a flat fee per month. If you’re renting out one residential home you may pay a higher rate than if you were renting out a multi-unit apartment. They may also charge extra for evictions and maintenance repairs.
Are you nearby? If you bought a rental property in a college neighborhood (or anywhere for that matter) that you don’t live nearby, a property management company is definitely worth considering. The company can handle emergency repairs, like frozen pipes, and check on the property if need be – tasks that are difficult when you’re not close by. If you live more than hour or so away from your rental unit, it’s probably a good idea to create an emergency list of of vendors who can help out if your tenant gets locked out or there’s a mysterious leak.
How involved do you want to be? When it comes down to it, how much time do you want to devote to your landlord duties? If you work full-time and don’t love the idea of mowing the rental property’s lawn on the weekend or painting rooms in between renters, and strictly view your rental as an investment, it’s probably a good idea to hire a management company.
How many units are you managing? If you’re renting out the other side of of a duplex that you live in, we’re guessing you can save on the expense of hiring a property management company. But, if you’ve got a multi-unit rental or own several units, you’ll probably get your money’s worth from hiring a management company.
Is your property part of an affordable housing program? If your property is subject to an affordable housing program, a qualified property manager can help you navigate those laws. H/T to Landlordology for bringing this up.