When do I line up my property manager?

Question

Hi,
    I believe I'm in the final stages of making an offer on my first investment property.  One of the things I'm not quite sure about is when do I line up the property management company?  Should I be talking to them now - even before making the offer?  Do you sign a contract with them now that gets them engaged the day I close on the property?  Any advice on dealing withe PMs would be great.

Thanks!

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It's 5 hours from me so not really an option.

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Why throw all or most of your profit out the window?  Manage it yourself.  If you're getting $600/mo and of that $100/mo cash flow just the placement fee of 1 mo rent will destroy 6 months of profit.  Their 10% will eat away a good chunk of your money as well.  You might as well not even bother if you're going to give away all of your income.

Andrea Hewitt · Answer

You should line up the property manager once you are under contract for the property and you know the closing date. 
When you are calculating the financials for any property that you are looking at, assume that the property management will cost 8-10% of the gross rents.  They will also charge you extra to fill any vacancies. In my research I have seen this fee be anywhere from 50-100% of one months rent on an apartment to a flat fee of $300-$500 dollars. This will probably vary depending on the east of rentals in the area and the amt of rent the unit brings in.  
If you are looking in one particular area, just contact several property managers and ask for their rates. That will help you more accurately calculate the numbers for potential properties.

N/A N/A · Answer

i have never done anything with property managers but i would assume you would need a property for them to manage. but i would also talk to them just to see how they are

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I was just thinking I'd need to factor in their costs as part of my property evaluation to determine it's a good deal.

Thanks!