Are Property Managers worth the money? Can I do this without 'em

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Are Property Managers worth the money? Can I do this without 'em

Curtis Harrison
Investor · UT · Member since 2014 · 11 posts · 2 votes

Good morning,

I'm a landlord with 1 property.  It's a 4 bdrm and rents for $1950/month.  I have been paying $135/month to a property management company and as far as I can tell, all they do is collect the rent, keep their 7% and send me the rest.  They also collect the money for utilities and pay the utility bills.

Historically, whenever a repair is needed, I either do the repair myself, or I hire somebody to do it.  I've had the property managers estimate repair costs for me and they're usually at least double the price I can get it done for, or about 10x the price if I do the work myself, which I usually do, unless it's a water heater, fence, or something like that.

My main concern is if people stop paying rent and I need to evict them.  Does a property management company take care of those things better than I could with just small claims court, or are they going to charge me all kinds of fees and stuff if they have to do the extra work of evicting somebody.  They charge me about $350 to find a new tenant...

I looked online briefly at Zillow Rentals and am wondering if I could use them to find renters and just let the renters pay me via venmo, or through Zillow Rentals.


Anyway, what's been your experience?  With only a single rental and my tendency to do all the repairs and upkeep myself, is a property management company really worth the monthly fee?  Or should I just do it all myself?


Thanks in advance for your advice.

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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
6y

If you are doing most of the repairs yourself, take over the management.  If you need to evict them (this is not something that commonly happens), you can always hire someone to do it.

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    6y

    If you are doing most of the repairs yourself, take over the management.  If you need to evict them (this is not something that commonly happens), you can always hire someone to do it.

    2Reply
  • David de Luna
    Rental Property Investor · NorCal · Member since 2018 · 399 posts · 222 votes
    6y

    Only your PM can answer the questions on fees for doing evictions. Every PM is different. I will say I like your 7% and the fee for filling your unit.  Awfully low. I can't be bothered paying all the bills - property tax, utilities, city fees, filling out Section 8 applications to work with various agencies, but I have a wonderful wife who is willing to do that. Without my wife, I'm pretty sure I'd see the wisdom in paying someone to make sure it gets done. I have out of state rentals that I use a PM for. To me it's worth it. There's no simple equation that will dictate one direction or the other. That's up to you. 

    2Reply
  • Curtis Harrison
    OP
    Investor · UT · Member since 2014 · 11 posts · 2 votes
    6y

    I live 30 minutes away from the property and can easily pay the utilities and such.  I just think $130 is quite a bit to spend each month to simply collect the rent check.  However, if something does go wrong, that's where I'm worried, but if I can just pay somebody to take care of things if they go wrong (eviction, etc..) then I think it'd be worth it.  How much does it cost to hire somebody to take care of an eviction?  Is that in the hundreds, or thousands?  I've had 4 different tenants in the past 10 years and no evictions yet. (knock on wood).  I've paid $15,000 in property management fees over that time period.  I think I'd do better just to do it myself and pocket the extra $1500 per year...

    0Reply
  • Kenneth GarrettPro Member
    Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
    6y

    @Curtis Harrison

    You can definitely manage your unit yourself. I have a number of SFR and small multi-unit buildings. The SFR by far are the easiest to manage. The most time is spent on filling units. I also found tenants stay longer in SFR. Since your doing most of the repairs yourself, save your money and self manage. Evictions are rare, but you can always work with a local attorney on the first one if it happens and then you'll know the steps. I've had to evict a couple of tenants, it's not that bad. If self managing is not for you then you can go back and hire a pm. The best way to learn how to manage your pm is self manage yourself, then you know what it takes.

    2Reply
  • Alex Corbishley
    Minneapolis, MN · Member since 2018 · 31 posts · 20 votes
    6y

    We self manage 10 doors.  I don’t think a PM is worth the 8-10%, that would be $1200 a month for us. We have had to handle a couple of involuntary turnovers and one where we had to threaten to sue.  Not fun, but we also have an attorney to advise us.  Venmo, Zelle and other online tools make management and rent collection very easy nowadays.  We use TransUnion to screen and call references.

    1Reply
  • Tyler Bains
    Realtor · Lubbock, TX · Member since 2020 · 144 posts · 80 votes
    6y

    It totally depends on your experience level and the amount of properties you hold. Are the properties local to you? Do you have issues leasing units?

    I would reach out to local property managers and interview. What do they charge, how do they market, what is their experience level, etc.

    2Reply
  • Stone Jin
    Rental Property Investor · Chandler AZ and Sylvania, OH · Member since 2009 · 708 posts · 561 votes
    6y

    @Curtis Harrison in your case you can self manage though 7% is pretty cheap for management.  I have properties out of state that I use management and in the same town I have some that I self manage from 2300 miles away.  Just know your aptitude and appetite and you should be fine.

    1Reply
  • David M.
    Morris County, NJ · Member since 2020 · 5k+ posts · 2k+ votes
    6y

    @Curtis Harrison.

    Since you are doing so much work, I wouldn't think you need the PM.  Honestly, paying a "few" bills shouldn't cause you to hire a property mgr in my opinion.  Are you physically collecting rent?  I'm used to being snail mailed a paper cheque to now having everything done electronically such as Zelle or "direct" deposit (holdover from pre-Zelle days and I gave the tenant the a/c# and they are depositing at a branch office).

    If you run into an eviction, that's where I'd have my attorney take care of it for me.

    I don't know how it works in your market, but renters pay the Realtor commission. So, its basically free for me to list on the MLS.

    I hope this perspective helps.  Good luck.

    1Reply
  • Tracy StreichPro Member
    Real Estate Broker · Tulsa- OKC Oklahoma · Member since 2017 · 868 posts · 801 votes
    6y

    So as with many of the comments above it could go either way.   Having a PM on one unit is a lot like having insurance. You pay for it every month and most of the time you don't need it, but, when you do need it you are very glad you have it.   That may be the lowest leasing fee in the history of property management for a $1950/mo rental.   PM involves quit a bit more than just collecting rent.   It may seem like that is all a PM does.  Are you up to date on all the Landlord tenant laws in you state?  If you self manage do you know the state rules for properly holding a security deposit?  I find that most self managing landlords do not do this correctly.  Are you up to date on all the changing laws on Fair Housing.   How would you answer the following questions. Can you deny because a potential tenant has been arrested and charged with Domestic Violence?   Can you deny for all Felonies equally?   If you do not know FOR SURE you are risking a Fair Housing violation.  That is what the PM is there to protect you from.  Not just collect money.  First time offense for a fair housing violation is $21,000.   By the way the answer to both questions above is no.   You cannot use an arrest or charge to deny it must be a conviction.   An if you think all felonies are equal read up and get out your check book. 

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    2Reply
  • Michael Robbins
    Property Manager · Henderson, NV · Member since 2018 · 501 posts · 317 votes
    6y

    I property manage here in Las Vegas for others and I also manage my own.  If you have the experience and time then you might consider managing yourself.  I believe a good property manager (and I am biased here) will take care of the asset, mitigate risk, and get you the highest rent.  

    2Reply
  • Michael Thach
    Member since 2019 · 144 posts · 93 votes
    6y

    A good property manager is worth gold and save you a lot of legal troubles and money. Just a quick example, my girlfriend is a property manager. Bought a new washer and dryer for a landlord. Within a year a waterleak. The damage was around 7k. Landlord had no insurance, so had to come up with 7k. The property manager contacted the manufacture of the washer and claimed on their advertising that they will cover for water leaks for their equipment. At the end the manufactor had paid 7k to the landlord. I know this does not happen often but a property manager get you usually discounted repairs for your properties, can protect you from legal liabilities which can get expensive, licensed property manager tend to use licensed technician for a discounted rate which helps you not to get liable. 

    We as landlord might think is a easy thing to manage our own, this is true in the events the property does not need anything, but if something happens I will always prefer a property manager handle it. Is just an extra layer of protection but you have to find a good one than it's worth gold.

    1Reply
  • Account Closed
    Real Estate Agent · Las Vegas, NV · Member since 2020 · 41 posts · 41 votes
    6y

    First, and foremost, it is important that you follow your state landlord-tenant laws.  As replies are posted from individuals from different states, their recommendations may differ from your state laws. For example, in Nevada if you hire a Property Manager the landlord, owner, can no longer access the property and ALL repairs must be completed by a licensed contractor.

    If you, yourself, don’t know or understand the laws, I guarantee that your tenants will. A professional property manager needs to know the federal, state, and city landlord-tenant laws, and they change frequently. It’s their responsibility to keep up on the laws.

    Maintenance requests are often the biggest pain for landlords. No matter how ideal the tenants are, appliances break, systems wear out, and little things will need attention. A professional property manager will eliminate these hassles by proactively handling tenants' requests or complaints, including after-hours emergencies, solving maintenance issues, and preventing any HOA violations.

    Labor and parts are expensive. Property managers build relationships with vendors. Often, these relationships provide a lower cost for maintenance and repair services that save you money and protect the value of your rental property. Another legal example, it is illegal in Nevada for a property manager to add, pad, any charges to a contractor's repair invoice. 

    Being able to screen applicants well is an important task. This may be the most valuable skill professional property managers offer. You want to make sure the tenants occupying your property are of high quality and will take care of your investment. Property managers put every applicant through a criminal background check, credit and eviction check, as-well-as employment and financial verification to protect you and your property.

    Your time is valuable. A professional property manager saves you time from having to deal with tenant requests and complaints, or maintenance and repair issues. Most times the needs aren’t big or expensive, but the timing and urgency is. You don’t have to go out and find reputable vendors, your property manager has already done the work for you. You can be off having a great time with family and friends, or be at work without having to worry about your property.

    Property managers — specifically good ones — are worth their weight in gold. It is entirely possible for a truly great property manager to save or make investors more money than their initial fees. That said, the cost of property management is more of an investment than an expense.

    If your property manager isn't providing these quality services, at a minimum, then you should consider hiring another or managing the property yourself.

    1Reply
  • Curtis Harrison
    OP
    Investor · UT · Member since 2014 · 11 posts · 2 votes
    6y

    I have been working with my current Property Manager for the past 4 years.  The previous one really botched things up and got me taken to Small Claims court by my x-tenant.  I had mentioned the desire to possibly raise the rent, since it had been the same for 3 years and the tenant was paying about $150 below market on their rent.  The property manager at the time assured me that they know how to deal with sensitive matters such as raising rent.  (oddly though they hadn't been monitoring value over the past 3 years and recommending raising rent gradually until I brought it up)  Anyway, they confronted the tenant when they paid their rent and told them that rent was being increased by $150 and if they didn't want to pay the new amount, they could vacate by the end of the month.  The way I found out about that meeting was, first, my previous next-door neighbor called me and told me there was a 'for rent' sign on the front lawn and that my house was vacant.  I called the property manager and they said that yes the tenant had decided to move and had been out for a couple weeks.  (this was 2 weeks into the month, so vacant==no rent being collected).  I got a summons from the court telling me about the small claims court date that I needed to attend.  I called the tenant directly to ask their side of the story and why I was being sued.  They told me that the Property Management company had pretty much told them the rent was going up in 2 weeks by $150 and if they didn't like it, they could leave.  I was being sued, because the PM had told the tenant that they were keeping their entire security deposit (2x rent) to cover repairs on the house that were present before the tenant had moved in..  I called the PM and they told me that there was no Move-In checklist, so all repairs were the tenants fault.  So, we went to court.  I checked my Landlord login on the PM's website and looked under 'Documents' and was able to find the move-in checklist for the tenant (the tenant had kept their original) and the PM said that the document didn't exist.  I basically went to court and sided with the Tenant and showed the judge the Move-In checklist and explained that the PM hadn't been doing their job and was bullying the tenant.  The Judge dismissed me from the case and ordered the PM to pay back the full security deposit minus about $100 for carpet cleaning.  That's why I fired the first PM.  The current PM is doing a pretty good job, but whenever a repair is needed, I have them get an estimate and I am usually able to find somebody to do the job for half price, or I do it myself for 1/10 the price...  Anyway, I am a bit worried about things such as Evictions and following all the landlord/tenant rules.  If I have a PM, then the blame falls upon them if they mess something up, and not on me (hopefully...).  So, they do provide a buffer.  The judge in the first case reasoned that since I had been paying PM fees in good faith assuming that the PM was competent and doing their job, then the blame fell on the PM when they didn't do their job.  Anyway, long story short, I'm probably going to stick with the PM that I have in case something bad happens, and to protect me from possible liability.  I don't want to get any huge fines if I accidentally do something slightly wrong...   Thanks for all the advice and please keep it coming !!!

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    6y

    @Curtis Harrison Why are you paying home insurance? Car insurance? Health insurance? Life insurance? All you're doing is throwing your money away every month to an insurance company that only processes your payment and nothing else!

    Why don't you fire all of them and just self-insure and save all that money?

    People that think PMC's do nothing are usually only looking at what PMC's do when everything is running smoothly. They rarely consider or seriously underestimate:

    1) How much effort it takes to keep it all running smoothly

    2) All the potential downsides and the cost of those.

    Good luck with whatever you decide, but don't be shortsighted in your evaluation.

    [email protected]248-209-6824
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    2Reply
  • Curtis Harrison
    OP
    Investor · UT · Member since 2014 · 11 posts · 2 votes
    6y

    You do make a very good point, as do many on this thread.  When things are running smoothly, it doesn't seem worth it to have a Property Manager.  However, when bad things happen, it's good to have a Property Manager who can navigate the murky waters and take care of the trouble.  Insurance is a good thing to have.  Thanks all for your good and thoughtful insights and advice.  I think I'll stick with the Property Managers for a while longer.  It is kind of nice to have somebody else absorb some of the stress of being a landlord.

    0Reply
  • Tricia O'Brien
    Investor · Anchorage, AK · Member since 2015 · 267 posts · 76 votes
    6y

    @Curtis Harrison

    My experience has been that a lot of property managers are not worth what they charge , and they do not really protect you from liability.  But if you can find that rare good one, they can give you some peace of mind.  Since you are local to the property and do a lot of repairs yourself, you could probably self manage...especially if you found a property management company that would do a tenant placement service when it becomes vacant and you need to find a new tenant.   In the Indianapolis , Indiana area, to have an attorney handle an eviction is  about $300 for the attorney's fee and then about $180 in court costs.  Some property management companies tack on a fee of several hundred dollars to handle an eviction ...it will usually be in the contract if they do.  If you had low end rentals, like single family homes that rent for $500-$800/month, having a property manager is usually more important than something more expensive like the $1950/mo rental that you have.  Be sure you have liability insurance on your property that covers you as the owner for at least $500,000 per incident and at least $1,000,000 per year in case your tenant tries to sue you. There's lots of help here on BP to help you navigate the "murky waters"! Best of luck to you.

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    6y

    @Tricia O'Brien that specifics can your share where a PMC doesn't protect an owners interests in your experience?

    Making a general statement is just an opinion unless you can back it up with facts.

    [email protected]248-209-6824
    Logical Property Management4.9458 Reviews
    WebsiteView Page
    0Reply
  • Tricia O'Brien
    Investor · Anchorage, AK · Member since 2015 · 267 posts · 76 votes
    6y

    @Curtis Harrison

    My experience has been that a lot of property managers are not worth what they charge , and they do not really protect you from liability.  But if you can find that rare good one, they can give you some peace of mind.  Since you are local to the property and do a lot of repairs yourself, you could probably self manage...especially if you found a property management company that would do a tenant placement service when it becomes vacant and you need to find a new tenant.   In the Indianapolis , Indiana area, to have an attorney handle an eviction is  about $300 for the attorney's fee and then about $180 in court costs.  Some property management companies tack on a fee of several hundred dollars to handle an eviction ...it will usually be in the contract if they do.  If you had low end rentals, like single family homes that rent for $500-$800/month, having a property manager is usually more important than something more expensive like the $1950/mo rental that you have.  Be sure you have liability insurance on your property that covers you as the owner for at least $500,000 per incident and at least $1,000,000 per year in case your tenant tries to sue you. There's lots of help here on BP to help you navigate the "murky waters"! Best of luck to you.

    0Reply
  • Greg Carrier
    Investor · Granger, IN · Member since 2015 · 195 posts · 129 votes
    6y

    We self managed until we got up to 25 units, then it became a bit too much too handle.  I recommend self managing at first just to get an idea of what it all entails.  It can be a bit of an emotional trip at first but I'm glad we did it.  That said I will never go back to managing my own now that we have more and a decent manager.

    0Reply
  • Brian Wagers
    Rental Property Investor · Northwest Arkansas · Member since 2016 · 52 posts · 30 votes
    6y

    Yes they are worth the money (good ones) and Yes you can do it by yourself. I managed my first single family myself before got into multi family and it was very doable. @Brandon Turner's book on managing rental properties is basically like a text book on it. Managing one yourself can give you some good experience but my ultimate goal was to always hire it out to focus on other facets of the business

    1Reply
  • Calvin OzanickBusiness Member
    Property Manager · Janesville, WI · Member since 2017 · 707 posts · 297 votes
    6y

    I am definitely biased as I am a property manager. However, you need to assess your individual situation. If you feel that you are able to handle most of the repairs on your own, then I would lean towards managing it yourself. However, property management is the purpose of scalability. This allows for you to free your time and give yourself options as your portfolio grows. As I tell my clients, you can either passively invest or get another job. I would be happy to discuss the preferences and differences that we see with our clients. 

    Wisconsin Property Managers4.7413 Reviews
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  • Mike D'ArrigoPro Member
    Turn key provider · San Jose, CA · Member since 2010 · 4k+ posts · 3k+ votes
    5y
    Originally posted by @Curtis Harrison:

    Good morning,

    My main concern is if people stop paying rent and I need to evict them.  Does a property management company take care of those things better than I could with just small claims court, or are they going to charge me all kinds of fees and stuff if they have to do the extra work of evicting somebody.  They charge me about $350 to find a new tenant...

    Evictions aren't handled in small claims court. If you don't have a PM and have to evict, you really need to know the eviction laws in your market. 

    1Reply
  • Monica Labrada
    Investor · Miami, FL · Member since 2016 · 33 posts · 10 votes
    5y

    @Curtis Harrison If you are doing all the repairs yourself and they just basically are collecting the rent I would manage the property myself. If you do not wish to collect the rent yourself you can have your tenants pay via ACH, or can directly go to you bank & deposit the rent, Cozy or Zelle,, Venmo,PayPal. There are numerous way to collect rent nowadays.

    Evictions would not be executed by Management they would executed by an Attorney. The only advantage of using an Attorney which the Management Company uses would be that that they manage many properties and use one particular Attorney they may get a discounted rate because of volume. If this is not the case then you would most likely pay the same rate. Simply hire your own if the situation arises. Hope this helps.

    1Reply
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