One of the most important issues you will face as a rental property owner is when to delegate management to a professional company. Most landlords do just fine by themselves and without enlisting the aid of an assistant. Sometimes, however, you may need some help and the right thing to do may be to hire a property management company.

Companies that manage property can be a big help, but they cost money. Here are some useful considerations:

When you engage a property management company, you are engaging an independent contractor, thus avoiding the problems that come with being an employer. It is relatively easy and hassle-free. They bring all the expertise necessary to deal with your tenants including screening prospects, marketing your rental property, collecting the rent, managing maintenance and repairs, interceding with tenant complains and, when necessary, pursuing eviction.

Essentially, you are paying for peace of mind and freeing up your time and energy to do other things, things that are hard to put a monetary value on. You could put that extra time into keeping healthy, so check the prices of gym memberships just to compare the cost of working against the cost of working out if it makes you feel better.

Is it worth it?

Probably so if you have a number of units to rent out. If you are spending all your time managing your units, perhaps your property owns you rather than the other way around.

If you live far from your rental property, it may be worth it to have someone closer to deal with issues as they arise. Or maybe you like to take time away from business to travel or just be gone. And of course, if you don’t like dealing with renters, that’s a good reason to job it out as well.

Even if you enjoy personally managing your property, you still may not have the time to do it well, particularly if you have another job. Even if renting is your main business, consider whether your time might be better spent searching for new properties, doing upgrades and renovations, or restructuring financial and business arrangements.

How much does it cost?

Property management companies typically charge between five and ten percent of the rental income. Can you afford that big a chunk out of the rent and still make the mortgage payments along with the required insurance, etc.? It might still not be feasible if you can’t turn enough profit to handle sudden, unexpected expenses. Many property management companies require you put aside a certain amount for this. Five hundred dollars is not unusual and the contract will stipulate when they can use it without checking with you first.

This isn’t as alarming as it sounds. When an emergency happens, like a flooded basement at 2 a.m., it is in your interest that they respond immediately rather than trying to get you on the phone. If the emergency exceeds the ready cash reserve amount, the contract will protect you from becoming liable for large expenses you had no opportunity to consider and work out alternatives.

How to find a good property management company

Ask around among colleagues and friends that have rental property. Check with a local condo or apartment association. Personal experience carries more weight and brings more peace of mind.

There are online professional directories. Check out the Institute of Real Estate Management (IREM) at www.irem.org and the National Association of Residential Property Managers' (NARPM) at www.narpm.org.

And finally, interview the companies to have all your questions answered before signing the contract.