Property Management is the route that many individuals take when renting out a home or commercial property. Property management generally consists of a company who cares for, and basically completely manages, your rental real estate. The way these companies make their profit is by taking a percentage of your rental money. There are many reasons to turn to a property management company, but there are also reasons why you may want to manage your own property.
Property management takes much of the responsibility of renting property off of the property owner. The property management company will do pretty much everything that is required to rent a property, from advertising the listing to going to court with a tenant who skips out on his rent. If you have a full time job and own several properties, then a property management company could be the only way to manage your property without going insane from all the work you’re putting in. In between tenants the property management company will hire repairmen to take care of any damage that the house has received during the last tenant’s stay. This can take much of the frustration out of repairs by saving you the time of finding a repairman yourself. Having a property management company represent your property is also beneficial because it shows your would-be tenants that there is a professional in charge of your property with plenty of experience. Everything a property management company does is itemized in a statement each month and sent to you along with the check for that months rent.
While a property management company takes care of many problems, and makes many processes easier, they also cost money. The general cost of having your property managed is around ten percent of your rent money. While that seems fair, you also have to remember that you’re paying for advertising and repairs. If you are renting out properties as your main career, a property management company is most likely not for you. While you wouldn’t have to work at all, you would be giving away ten percent of your salary that you could be making if you managed houses for yourself. Another disadvantage of a property management company is that they will not treat your house as well as you would. They have hundreds of rentals that they need to manage and will not care for your property like you would take care of it.
Hiring a property management company is really a decision based on whether or not you are willing to lose a percentage of your rental money in exchange for doing less work. If renting properties is just a side business to your full time career, you may not be able to put in the time required to manage them yourself. If you do have the time, you may want to work for that extra ten percent and milk your properties for all they are worth.