Should I Hire A Professional Property Manager For My Apartment Building?

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Like everyone else these days, I’m all about saving money.  But, one lesson that I’ve learned in business time and time again is when I should pinch pennies, and when I shouldn’t.

  • I believe that a professional property manager is worth their weight in gold, for a number of reasons:
    • It is important to be totally objective when screening tenants; it is all too easy to get sucked in to an emotional tale of why their credit score is low or why they weren’t able to pay on time in their last rental.   Property managers, on the other hand, assess the likelihood to pay based on a tried and true formula, and usually employ a background screening service.
    • Finding a new tenant when you only have one (or a few) properties to advertise is far more difficult than casting a wide net advertising for tenants for multiple properties.  You haven’t really saved much if your rental is vacant for an extra month or two!
    • Professional property managers play by the rules.  Because it is their vocation, they are up to speed on all the intricacies of landlord-tenant law … how many days notice to pay or quit, how the eviction process works, etc.
    • Property managers have special accounts set up for holding escrow, and accounting for interest which under certain circumstances must be paid to the tenant.
    • Paperwork!  Because they’ve “seen it all,” property managers have comprehensive application forms and lease documents, walk through forms, etc. that address every situation imaginable.  That offers you far more protection as a landlord than using pre-printed forms online.
    • Perhaps the most valuable asset of all is that professional property managers have a reliable network of affiliates – everyone from handyman to plumbers and electricians that they can count on in an emergency.  They also work with attorneys who specialize in rental properties as well as tax professionals to give you sound advice when applicable.
    • Thorough inspections, both before move in and upon move out, are essential to a smooth transition.  Having an experienced, objective 3rd party to conduct these inspections and insure that the appropriate follow up paperwork is completed is a must.
  • What Does it Cost to Hire a Property Manager?
    • Typically, hiring a professional property manager costs between 8% – 10% for a single family home and 6% – 8% for a larger apartment building based on the monthly rental income.  As an investor and property management team member I believe it’s well worth it.