09 Jan Should You Hire A Management Company?
One question that I get asked a lot buy new investors is “Should I hire a property management company?”
The short answer is YES. Most new investors also have a full time job. Property management is a big job. It is more than just collecting and depositing rents. Property management includes:
- Collecting rents
- Handling tenant complaints/calls
- Scheduling repairs/maintenance
- Advertising and showing vacancies
- Paying contractors
- Screening potential tenants
Property management isn’t cheap. Most property management companies in the Cincinnati area charge anywhere between 8%-10% of collected rents. They also charge anywhere between a half month’s rent to a full month’s rent for finding a tenant for a vacant unit.
Property management is certainly a full time job. Your time is limited. If you have a full time job or live far from the property, you may find it very difficult to deal with the above duties of managing your property. Sooner or later, you may become overwhelmed with the duties of managing a rental property. I learned the hard way.
While the monthly management fees may seem high in the short term, it may be cheaper in the long term. Due to lack of time, you may find yourself putting off repairs, finding contractors, advertising vacancies or showing vacancies.
This will have a negative impact on the profitability of your property and ultimately the value of the property in the long term.
Not all property management companies are made equal. Before hiring a property management company, you should always interview several companies and ask for references. The better companies should have no problem providing this information.
Hiring a property management company will not only save you money in the long term but it will also free up some time for you to find other investment property. Additionally, a management company becomes a buffer between you and the tenant.
If you need to find a property management company, give me a call or send me an email and I will provide you a list of some that I have dealt with in the past.