Property management can be approached in two ways, each with its own pros and cons.
Hiring a Property Manager
One approach is to hire a property manager who will handle all rental-related tasks. This includes renting out the property, collecting rent, addressing tenants’ concerns, arranging for maintenance or repairs, and cleaning the unit between turnovers. The fee for a property manager varies depending on the size and location of the property, but typically ranges from 5% to 10% of the monthly rent. Additionally, property managers usually charge half to a full month’s rent each time they place a tenant. This option is ideal for those who want a completely hands-off and worry-free experience and would like to focus their time on other important matters in their life.
The other approach is self-management, where the property owner handles all the tasks of a property manager. This option provides a valuable learning experience for real estate investors and saves money that would have been paid to a property manager. However, it also requires the property owner to be experienced in finding and handling tenants. This approach may or may not be better than hiring a property manager depending on the owner’s experience and ability to manage the property.
A hybrid approach involves outsourcing the most crucial part of the property management process, finding tenants, to a realtor while handling the day-to-day management of the property. This approach strikes a balance between hiring a property manager and self-managing the property. It may be a good option for those who want to save money on the monthly fee and still ensure that they get quality tenants.