We have shared tips for hiring a property manager and responsibilities of a property manager. We thought it best to cap this off with an article on whether you need a property manager in the first place.
The truth is that not all property owners actually need a property manager. As an investor in real estate, you must recognize that every expense you incur hurts your bottom line. In order not to affect the finance bit of your investment, do not take in unnecessary costs. One of the first unnecessary cost may be hiring a property manager.
Here are the 5 key questions to ask yourself before hiring a property manager.
#1 What is your level of experience in property management?
If this is your first investment in real estate and you do not have a clue about property management, you need to quickly decide whether it is better to bring in help or learn on your own as you go. Both have pros and cons but ultimately the choice is yours.
#2 Does the number of units you own warrant a property manager?
This is a critical question to ask because it has a direct financial implication on your bottom line. If you have many units, it makes sense to hire a manager to help run things but if you have just a few that you can manage on your own, do not take in unnecessary expenditure.
#3 Can you really afford a property manager?
Before you decide on whether to hire a property manager, you must crunch the numbers to figure out whether your finances can afford to sustain the costs of a property manager. In most cases, their fees usually range between 4 to 10 per cent of your property’s gross income per month. Ensure the math works in your favor.
#4Are you in a position to manage your property?
This is a question of time. Most people with real estate investments tend to have a full-time job somewhere else. Therefore, considering that property management is an almost fulltime gig, it is important to assess whether you are in a realistic position to manage your property. If not, it makes sense to hire someone to do it for you.
#5 Are you ready for the liability that comes with a property manager?
You must always keep in mind that you are giving your property manager the authority to make decisions on your behalf, meaning that even mistakes they make will be made on your behalf. Some such mistakes can end up costing you dearly both legally and financially.
The decision whether to hire a property manager must be clearly thought out as it is not a decision to be taken lightly, so don’t rush it.
We trust this information will help you make a more informed decision.