This is a question that many landlords face. Before you consider the realities of the situation, you may find yourself strongly on one side of the fence of the other. But there is a certain type of landlord who will most benefit from hiring a solid property management company. I have laid out some of the reasons why this would be a good idea. For all the rest of you, it’s probably better to act as your own property manager.
1) You Have Many Properties. If you are at this stage of the game, you probably don’t have enough time to take care of all of your properties yourself. Even two or three can be a challenge: collecting rent, pursuing evictions, performing repairs, answering phone calls. When you get into the double-digit range, you are starting to look at an option that is more than a full time job. At this point, a property management company like Strata will be the best next investment you can make.
2) You Can Afford it. Many landlords started buying investment properties in order to achieve financial independence. If you have long since gotten to this level of cash flow and wealth accumulation, it may not be your goal to keep your money growing. If you are more or less satisfied with what you have achieved, and you can afford it, by all means hire a property management company to make your life easier. Even if you hope for more achievements in the future, hiring a property management company now will give you the freedom of time and energy to make those things happen.
3) You Rent Out Affordable Housing. If you are part of an affordable housing program, your tenants make below a certain amount of money each year. Your rent is subsidized by the government, but you’ve got to meet a complicated criteria of rules in order to keep this arrangement in order. You’ve got a lot to lose if you mess things up so, unless you already have a lot of experience, it may be best to put an experienced property manager in charge to save you the time and vulnerability of such a position.
4) You Don’t Want to Run a Business. Or at least, you don’t want to be a boss. If you get to the stage where you have many properties, you will have to have employees. This is a reality that many landlords refuse to take on. By outsourcing the management, you empower (and pay) someone else to manage the people required to keep your properties in order.
All of this will eat into your profits, but it will keep your properties in perfect shape, your tenants happy, and keep together all of the little things that can go wrong. If you are coming to the end of your rope as a landlord, this may be the way to get your life back. However, if you are perfectly happy being your own property manager, keep it up. But know this is an option if you ever find yourself burning the candle at both ends.
