When To Hire a Property Manager

by | BiggerPockets.com

When I think of Property Management, I think back to when I first started investing in real estate. It was 1989 and I was working full-time for a painting contractor, selling real estate on the side as a newly licensed agent, and to be quite honest, I don’t think I felt like I could afford to pay a property manager.  You see I was trying to save every nickel I could to put it towards the next property I wanted to buy.  At that time, a good property manager made more money than me and I don’t recall having a lot of money in reserves either, although I did have access to emergency money through credit. So what did I do? At the time, not much. In fact, I just kept plodding along for the next couple of years until I started to realize being a property manager just didn’t make sense anymore.

For some folks, especially those who have a good W-2 income or a decent paying job, a good property manager can make sense right out of the gate. Although I did my own management for several years before actually becoming a professional property manager at RE/MAX, I felt I had an edge at property management since my college degree was in management, I was a real estate agent, and I had taken many courses in property management on my way to studying for my broker’s license.  After training and years of being a property manager it became more apparent when and why people would hire someone to manage their properties.

Related: 10 Ways to Help Out Your Property Management Company

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Hiring a Property Manager: When and Why?

For me, it was when the time it took and the money I saved doing everything myself no longer made sense.  The fact of the matter is; a residential property manager where my units were located was typically a $15 to $20/hour job. Now – even though I knew that, it took me so long to hire one because I was a property manager at RE/MAX (making 100% commission), working in the same exact area as all of my personal rental properties. So it wasn’t much of a struggle for me to handle my own properties…until the market crashed. Once that happened, the RE/MAX I worked for closed and the next brokerage firm I went to didn’t have a property management department for me to work at. Then it all became a hassle, especially when I wanted to focus on other parts of the industry (i.e. notes).

Some other reasons you may be looking into a property manager could include things like:

  • Proximity to the property
  • Number of units under management
  • Time it’s taking you to turn over the unit
  • Record keeping abilities
  • Response rates (are you open 24/7/365?)
  • Maintenance and repair systems
  • Handling tenants’ collections, evictions, etc.
  • STRESS! Did I mention the unnecessary stress of the job?

Also, this article wouldn’t be complete without a list of advantages of a good property manager (*note, I said GOOD property manager). These could include:

  • Better screening and quality of tenants
  • Better collections and accounting
  • Better service and responses provided to residents
  • Less turnover (no matter how many people you know, their rolodex is probably just as good if not better)
  • Better repairs and maintenance systems (with all licensed and insured workers! So a lot less liability on your part)
  • Better handling of legal issues

And the MOST important thing was freedom and more time. That, I’ve come to realize is priceless.

How to Find a Good Property Manager

Now that’s the good news if you get the right management company, but the bad news is if you don’t. So, what are some things to look for:

  • of course you look at their fees, (most companies offer discounts for multiple units and recommendations),
  • how they handle tenant and owner funds,
  • policies on collecting and setting rents,
  • how they handle inspections and repairs, tenant marketing, screening and retention,
  • and examining the company size, staff, systems, experience, reputation, etc.

For example, the property manager I have that handles the majority of my properties has been in business over 25 years, manages well over 1000 units in my particular county, has a very competent staff and systems in place, and the broker owner is a district justice to boot. In fact, when you call in to their answering service you’ll hear things like, press #4 for no heat, press #5 for plumbing issues, so that gives you an idea how organized and automated they are. Plus I get detailed monthly statements from them, and all my contractors bill my property manager so I never have to stop to write a check!

Related: To Manage or Not to Manage: 5 Important Considerations To Ask Yourself

What My Experience Tells Me

And finally, as a previous property manager, do I have any suggestions for you as an owner to make your experience better with your management company?  Of course!  You still have to manage these guys.  But thinking back to my best clients, the guys who were the easiest to work with were the folks who listened, followed our advice, were reasonable, and above all took care of their properties, especially when we asked them to. The last one is key, if you don’t take care of your property or you aren’t attentive, then it doesn’t matter who your property manager is.

Looking back today hiring a property manager was one of the wisest things I’ve ever done. It enabled me the free time to start a new and even more successful business than I had ever had before. The skills I had learned from being a manager has helped tremendously in finding and managing good folks to manage for me, and hopefully reading this will help you on your journey to finding a good property manager.

So, now the question for you is when will you be taking things to the next level and hiring your property management company?  (Unless you own a property management company there’s really no excuse!)  As I get older, I know my family appreciates the fact that I’ve taken care of this chore for them in advance.

If you don’t have one yet when do you think your goal is to get one?

Leave me a comment below and let’s talk!

Photo: Victor1558

About Author

Dave Van Horn

Since 2007, Dave Van Horn has served as president and CEO of PPR The Note Co., a holding company that manages several funds that buy, sell, and hold residential mortgages nationwide. Dave’s expertise is derived from over 30 years of residential and commercial real estate experience as a licensed Realtor, a real estate investor, and a fundraiser. As the latter, Dave has raised over $100 million in both notes and commercial real estate. In addition to his investments and role as CEO, Dave’s biggest passion is to teach others how to share, build, and preserve wealth. He authored Real Estate Note Investing, an introduction to the note investing business, helping investors enter the “other side” of the real estate business.


  1. stuart Stevens on

    I interviewed five property manager companies that had from 100 to 1000 units. The price for each was a combination of a cost to place a tenant and a monthly cost. The prices varied and generally if the monthly increased than placing a tenant decreased.

    I wanted to make sure that the property manager had a concentration in the area where the home is located.

    I found that the property manager had low cost handymen on call which kept repair costs down.

    So far I have had no vacancy. The house was rented out two weeks before the previous tenant’s lease was up and the previous tenant moved out two weeks early.

    My decision to use a property manager was easy as I lived 400 miles away.

  2. Thanks for this article Dave. My husband and I are within a couple weeks of settlement on our first investment property – a triplex that is located about 30 minutes from where we live. Two of the units have existing tenants and one unit is vacant. Our plan is to make slight upgrades as the units become vacant with my husband doing most of the work. We’re trying to decide whether to manage them ourselves or turn it over to a property manager. My vote is to let a good PM take care of that for us and maybe this blog will help convince my husband!

    • Dave Van Horn

      Thanks for the response Jan!

      It’s not a bad idea when starting out to have a good property manager because they’re most likely going to do everything right from a good application, good lease agreement, be sure that they pull criminal/eviction/and credit report, they’ll also properly escrow the security deposits by your state law requirements, etc.

      Ask on BiggerPockets if anyone has a good property manager in your area, with a good recommendation your husband may be more inclined to be on your side! Hope he likes the article!


  3. Winston Risser on

    Hey Dave, Enjoyed your post !! I am new to Real Estate investing . When I bought my first rental there was a tenant in place . And I was trying to learn how to manage a tenant along with the rules and regulations in Oregon. I found out real quick that it cost me way more money to try to be responsible for collecting rents and working with the crasy tenant at the time.
    So I started interviewing property managers and eventually found and established management company with great systems in place. I have received rents on time ,and receive monthly statements . Well Well worth the money to me.

    Sometimes I think well maybe I am just being lazy, but it just makes more sense for where I am at right now .
    What tips would you have for me that makes my properties stand out for my the management company . Where they love managing my properties and working with me which creates $$$$.
    And then also letting them know that I am attentive and that I do care about the success of my properties???


  4. I love having a property manager! Since my rental was my first foray into real estate investing and I had a full-time job, I chose to go this route. My PM was able to get me a higher rent than what I thought I could get, which not only covered his fee but gave me more profit, and my unit has not been vacant yet (two different tenants so far and my PM had the second tenant ready to move in the day after the first tenant moved out). His contractors bill him and he takes it out of the rent so I never write a check and the request for repairs has been minimal, genuine, and fair. I receive the rent direct deposited into my account as well as monthly statements. I only met the first tenant one time and that was because when he moved out I purchased a shed from him that he had built in the backyard. I haven’t met the second tenant. My PM has also become a good friend and gives me great advice on the local market (his wife is a realtor for the biggest game in town). I know this is a heated debate but I personally couldn’t be happier with my choice.

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