Managing properties can be quite hectic. If you’ve never experienced the thrill of 3AM phone calls from a tenant, consider yourself lucky. But, what happens when you’re trying to juggle an entire apartment community, or even just 4 to 5 apartments? One person can do only so much. Here’s how to know when it’s time to hire help.
Where Are Your Apartments In Relation To Your Home?
If you live far away from your tenants, it’s hard to manage them, annoying to stop over to fix something small, and collecting rent can turn into a hassle. Generally, living a few blocks away is no big deal, but you don’t want to live in one state/territory and have to manage tenants in another. For example, you wouldn’t want to live Sidney and manage tenants in Brisbane. It would be too difficult. Even a drive of 20 Km might be too much.
How Many Units Do You Own?
Do you own just one unit? If so, managing it is probably not a big deal. Even most new landlords can take on one apartment unit. It’s when that one unit swells into 5 or 10 that it becomes a problem. Even if you don’t have a lot of properties, or you think you’re able to manage them all, it still might be a good idea to outsource. Why? Because a property manager can take better care of everything than you can.
Most people who get into real estate also believe that they won’t be a slave to their properties, yet many of those same people realize that this is exactly what happens due to the time-consuming nature of keeping up a property. It’s inevitable - the lawn mowing, the maintenance, the repairs. Even one property can become a serious chore.
How Much Money Do You Make?
Calculating how much money you make from your property will help you make the decision as to whether it makes sense to outsource it. Most building maintenance services aren’t cheap. At the same time, if you can still clear a tidy profit, it won’t matter what your margins are.
A small profit is still a profit, and it will allow you to spend your time doing more productive things, like finding new properties to buy. This is where the money is, anyway - not in maintenance.
Are You A Control Freak?
One of the biggest hurdles preventing landlords from being successful is their tendency to be control freaks. This is a hard thing to admit to yourself - do you need to be in control of everything that happens with your property?
Property managers take over the day-to-day operation of your units, so it’s unlikely that you’ll see your tenants or the property very often. If this bothers you, don’t hire a property manager. But, also realize that you won’t be able to keep very many properties.
If you decide that hiring a property manager is the right move for you, look for experience. The management team should have numerous properties under its belt, it should be willing and able to give you references that you can call, and it should have mostly satisfied customers (landlords).
Call past and current clients and find out how the property management company operates. Think about whether their experiences match your vision of what a property manager should be, and act accordingly.
Ask About Services and Guarantees
Ask about the services they offer. One thing you want your property manager to do is screen tenants for you. This is probably the hardest part of landlording, and it’s something that gets expensive if it’s done wrong (or not at all). Bad tenants can cause thousands of dollars worth of damage and skip out on even more in rent payments.
While there are laws that protect you, laws do tend to favor tenants and give them generous extensions to make payment. To remove them from your property, you must go through a long and expensive legal process. It’s better not to have to deal with this at all. If your property management company has an extensive screening process, you reduce the risk that this will ever be an issue.
Ask about other services, like rent collection, what maintenance they do (and don’t do), and if they guarantee any services or have a service level guarantee.