by Dave Van Horn | BiggerPockets.com
(& Why I Wish I Did Sooner)
For me, as a real estate investor, there were two jobs that were hardest to give up.
One job that was hard to hire out was painting, as I had been a painter myself for 13 years before becoming a contractor for another 10 years. Of course, there’s nothing wrong with working in a trade, but after hurting my back and then entering the world of real estate and note investing, it no longer made sense for me.
The second job I was slow to hire out was property management. In the end, however, I didn’t have much of a choice. I had been a property manager at a ReMax, and we merged with another real estate office that already had a rental department. As a result, they no longer allowed their regular agents to do property management.
After these rules changed in my real estate office, not only did I have to find a property management company for my clients, who were typically investors with multiple properties, but I also had to find a property manager for my own rentals since at this point, I no longer had enough time to do it myself, especially after entering the note business.
Luckily, I knew a couple who had gone into the property management space several years before, and they were managing a lot of units at this point. Plus, I knew the wife from when I first started in the business, and she had a very good reputation. On top of being a real estate broker, she was also a District Justice, which is someone who oversees landlord/tenant complaints at the local court level.
Besides the long track record and the fact she was politically connected, there were many other benefits I quickly enjoyed upon hiring them.
6 Advantages of Hiring a Property Manager
1. They were affordable.
In fact, they’re much more affordable than I originally thought. When I factored in all the things they did and the time they saved me, it is well worth outsourcing.
2. They offered great on-call service.
They had a 24-hour emergency service that covered things like heating, plumbing, or electrical issues. Today, I travel a lot, and this service is invaluable to me. I can still use my contractors if I want to, but sometimes it’s easier just to let them handle most of the little repairs.
3. They maintain great records.
The beauty of using their service is that they track everything from the rents to the repairs, and they even write the checks to cover expenses like utilities and contractors. It’s great to get a nice year-end package that I can just hand over to my accountant.
4. They represent me in court.
Today, I’m a really busy guy. I can focus my time on running my business, or doing the things I’m best at, and they can fill in for me on those unfortunate cases that require a court appearance.
5. They’re compliant.
I especially appreciate their emphasis on compliance when it comes to drawing up leases and screening tenants. I love that they screen for things like credit history, criminal background, evictions, and even Meghan’s Law (history of sex offenses). They also have to stay up-to-date on licensing requirements, local ordinances, and state laws and regulations.
6. They handle my showings.
Not only do they show properties to prospective tenants until they’re rented, but they also meet various HUD and Township inspectors for yearly rental licenses. This is another area where the property manager saves me a lot of time and aggravation.
Disadvantages of Hiring a Property Manager
When it comes to disadvantages of hiring a property manager, I can really only think of two: cost and control.
For many real estate investors, the biggest deterrent from hiring a property manager is probably the cost, which definitely cuts into your monthly cash flow. So if you have the time and the skills, and it’s more lucrative for you than other tasks, it may make sense to manage your own units.
Another disadvantage could be that once you hire a property manager you’re not in control of everything anymore. Maybe you’re not as dialed-in when it comes to the maintenance and condition of your properties or the choosing of your tenants, especially as you start to rely more and more on the management company. Whether you can accept that is a personal as well as a business decision.