In our previous post Before Buying a Rental Property - Do You Need a Property Management Company?, we discussed why a new or prospective rental property owner might want to hire a management company. But if you already own one or more properties, and handle management yourself, it still may be worth considering hiring a management company. Here are four important questions to ask yourself if you're considering working with a management company.
How many properties or units do you own - or plan to own?
If you own just one or two rental properties, with a relatively small number of units, you might find handling them on your own manageable. But if you own a large number of properties, managing them on your own can quickly become a major burden. And if you are looking to purchase additional investment properties, does the thought of taking on that additional workload of management seem daunting? Being just one person, your ability to handle properties effectively and efficiently is limited. As your portfolio grows, the quality of your management can suffer. Working with a management company can allow you to own more properties while still ensuring they are all managed well.
Is property management hurting your quality of life?
Different people have different thresholds for how much work and stress is too much. Managing your own properties involves being on call 24/7 to deal with emergencies, and regularly dealing with problems that arise. If you own several properties, or even just one, how much of a negative impact are the responsibilities of management having on your life? If you are finding yourself overwhelmed by the properties you own, working with a management company is an ideal way to lessen the burden of work and responsibility in your life.
Are you always able to get units rented quickly?
Getting vacant units filled quickly is essential to maximizing the profitability of your investments. Showing units, advertising, and communicating with potential tenants is necessary to quickly fill vacant units, but it takes a lot of time. If you are having trouble finding adequate time to dedicate to filling vacant units, you are hurting the profitability of your investment. Look at your past occupancy rates, and honestly assess if they are acceptable. An effective management company will know all the best ways to find good tenants, and will be well equipped to fill empty units as quickly as possible.
Would your time be better spent on something else?
This is a subjective question - only you can decide if property management if the best use of your time. Many property investors have other valuable skill sets, and dedicating too much time to management can end up being a poor decision for overall productivity and profitability. If the time you spend managing your properties is cutting into your productivity in other areas of your life and business, it may be time to seriously consider working with a management company. You may be able to make a lot more money dedicating yourself to other work, as opposed to the relatively small amount you will save by managing properties yourself.