I have a townhome that I'm trying to rent. It has been vacant for 3 months now. I'm thinking on hiring a property management. This is my first house and I would like to turn it into rental property.
My questions are:
-) what are the advantages and disadvantages of a property management?
-) what percentage or fees are acceptable range for a management company?
-) how to screen and find the right management company?
What are the advantages of managing the property myself?
Thank you in advance for you advise.
1. They have a handle and a vetting process hopefully for tenants in your area!
Typically we see 10% or 150$ per unit for management fee.
Check and see how units they manage we feel comfortable with companies handling over 100 units.
Saving money if you mange it yourself but also keep in mind you are always on call.
First, I would ask BP members in your area for referrals. Short of that, there are acouple of things I always do to check out a property manager:
1. Check their website for available rentals. If they have a large amount they are not aggressive enough.
2. Ask them for referrals. Talk to the owner of their current managed properties. Owners will be very candid with you.
3. Negotiate their fee. I always plan for10%, but aim for 8%. They are almost all flexible and you will never know if you don't ask.
4. Make it very clear that you are shopping around. They will fight for your business then.
5. Visit them at their office. If it is a disaster or unorganized then you know what you can expect out of them at your property.
Welcome to investing and sorry to hear your property has been vacant for so long. Here are my comments:
- Pros of Property Management:
- Peace of mind: You don't need to worry about anything, and they take care of the tenant and property issues.
- Cons of Property Management:
- Cost: Average is 6 - 10% of monthly rent
- Transparency: They own the information (in their property management software) and only share what they want to share with you.
- Lack of Control: They make all of the decisions and do not allow you to provide input.
- Percentage fees: See above, but it will typically be closer to 10% if you only have 1 unit.
- Screen PM companies: Here's a great post from BP on the Questions to ask a PM. I focus on operational questions over the recommended personal real estate investments, as many PMs don't invest themselves. I'd also get at least 3 referrals from folks who have properties under their management (but aren't friends with the PM).
- Pros of Managing yourself:
- Transparency: You know what's going on at all times.
- Control: You get to make the decisions and feel comfortable with them
@Landy St-Jean I kind of remember you posting before about this house. If it's still not rented, we should talk. I'm a property manager in the area, and I'm happy to give you a little free advice if you need some options.
@Dana Hoffmann Thank you Dana. I will look into the BP post and thanks for the info.
Dawn, I will definitely give you a call and we can set up an appointment. We had water damage on the kitchen floor and were doing the renovation. Now we are ready to have it rent.