The Benefits and Drawbacks of Hiring a Property Manager to Rent Out Your Home
June 1, 2021
One of the most significant benefits of hiring a property manager is that they not only handle all aspects of management for you, such as tenant selection, completion of necessary paperwork, inspections, and so on, but they also handle most of the bookkeeping. I would receive a monthly statement from most of my property managers stating the total income, expenses incurred, their commission, and the net amount paid into my bank account. This makes accounting a breeze.
Property managers often charge between 4 and 15% of the rental income to manage your properties. The larger your portfolio is, the lower the commission rate they will accept.Feel free to find more information at Polaris Property Management, LLC.
Another benefit of having property managers is that the unpleasant tasks of evictions, notices of rental hikes, and letters ordering renters to correct deficiencies in keeping the property clean and tidy are no longer your responsibility.
So, how do you go about picking a property manager?
It’s a numbers game, much as when choosing a house to buy, a real estate agent to work with, or a handyman to work on your properties. Interview prospective managers, ask them how they have handled with specific difficulties in the past, and then try them out based on recommendations from friends or other landlords. If you don’t agree with them, you can always modify them afterwards. Changing agents, on the other hand, may not always be easy, especially if you purchased the property with renters already in it.
Let me tell you about an encounter I had with a UK agency. I acquired a house with renters in it, and as a result, I’m stuck with the agent who rented it to them in the first place. Because it was my first investment property, I didn’t want to entrust it to an agent; instead, I wanted to manage it myself. But it wasn’t as simple as that. The agent kept their security deposit because he had found the tenants, and despite the fact that it was my property, he required that they pay the rent to him, which he did, and then withheld the rent from me. I didn’t have any legal options unless I evicted the renters, which I eventually had to do. It was all really pleasant because the renters were aware of what was going on. They stayed away from the house for one night to make it legitimate, after which I provided the agent with the court’s eviction notice, and he was required to return the security deposit and pay me what he owed me on the rent. My tenants returned to me after that, we signed a new lease, and I took over management of the property. However, be aware that an amicable eviction and wresting your home away from another management agent does not always work out.
It should not be assumed that just because you hire one management business to handle one or more properties, you would utilise the same company to manage any subsequent properties you acquire in the same region. In fact, enlisting the services of two competing organisations can be beneficial, since one will try to outdo the other in order to acquire additional business. This pertains to a previous programme I did on choosing builders. Always acquire three quotations for each task, and don’t settle for one builder all of the time. The same is true for agents.
If the property management does not respond swiftly to tenant complaints or maintenance, you may lose your renters and your money. Let me tell you about a predicament I encountered when I first started investing in property in the United Kingdom. I recently had some renters move into one of my houses after signing a lease agreement and paying a month’s rent and a security deposit in advance. I had delegated property management to an agency with the expectation that my renters would contact them with any concerns that arose, and they would act on my behalf as soon as they were aware of any issues that needed to be addressed.