When it makes sense to hire a property manager

11 Replies

I’m looking at a few potential rental properties that are about an hour away from home. As such, my wife recommended that we hire a property manager to manage them. Any advice on when it makes sense to hire a property manager? How far is too far away from home that would justify hiring one?

It's too far.  30 minutes is too far for me.  

umm you can hire them for a certain things... You can be involved in different levels.  

My thing is how much do you care of how well they are doing the job? Are you willing to commute often how often? Is the investment is worth it......is not an easy question. I wouldn't like to have prop all over the country. At most in two states, but I live in one and want to travel to the other often. So you could mix business with trips

Whether you are hiring a property manager, an office manager, a virtual assistant, a plumber, or someone to mow your lawn, it all depends on your cost/benefit analysis.

The biggest task with rentals is turnover. You can handle the inspection, maintenance, and cleaning. Hire a property manager to handle the marketing, showing, tenant screening, and getting them under contract. Then they can let you take over management from that point. I do this all the time for about 20 Landlords and they love it because I give them quality tenants and they handle the day-to-day rent collection, maintenance calls, and drive-by inspections.

I don't think one hour is that big a deal but you have to decide for yourself. If they are lower-class properties with more maintenance issues or higher-risk tenants, then they will take more time. If they are upper-B or A properties, you can probably handle them yourself.

As Nathan suggests C class may be better suited for a PM. A/B class you should easily be able to manage yourself an hr. away.

@Stanley Thomas Happy wife, happy life? In all seriousness, my suggestion is always: “If you have to ask, hire one!” It’s not like you can’t decide to manage yourself after 12 months. That said, I spent enough time messing around with rentals when I was a kid. I knew I didn’t want to be a hands-on landlord when I started investing. It made the decision easy.

You could also ask yourself: “What happens the one weekend I’m busy and my wife drives an hour each way to show a vacant unit to prospective tenants...and all 3 of them no show?”

Not that you’ll hit that exact scenario but there will be some version of that that creeps in. Hold onto property long enough, it’s inevitable. The pest control guy gets lost, the HVAC contractor is 2 hours late, etc.

@Stanley Thomas , as @Nathan G. said up above, a lot depends on your individual situation.  The class of properties is important as stated.  Other info is how experienced are you?  How much free time do you have?  How much free time do you have compared to money?  there is a lot to figure out to get the right answer for you.

Property managers are good when you do not want to deal with the daily calls, payments, screening of tenants. Property managers also rent the properties fairly quickly.  The company I worked for handled all maintenance calls, the only time we contacted owners were when it was a problem over $250.  Pretty much all the owners had to do was wait for their checks every month. With that being said, they do collect around 10 percent per month for their fee.  We also collected half of one months rent for our fee to get the first tenant. Hope this helps.

@Stanley Thomas With a property an hour away I would let the class of tenant steer whether I would hire a PM. If the property is in a low income area, I would definitely hire a PM. The day to day management, being available when issues come up, and tenant screening are extremely important for an investment to succeed in those areas.

 if it is in a B class area or above I would try managing it on your own because typically that tenant class is easier to manage day to day. If it ends up not working for you, then you can always hire a PM.

There are lots of things you can do yourself online and over the phone.  I would not get a manager until you have about 6-10 units. 

You should learn basic property management so you know what to expect from a manager. 

Thanks for all the guidance. It is a C class property so it will probably require a lot more management than what we’re used to. The numbers make sense but the distance is the drawback since it’s a C class. I guess it doesn’t hurt to try to manage it ourselves and monitor the situation for a few months then hire a PM if necessary.

Originally posted by @Stanley Thomas :

I’m looking at a few potential rental properties that are about an hour away from home. As such, my wife recommended that we hire a property manager to manage them. Any advice on when it makes sense to hire a property manager? How far is too far away from home that would justify hiring one?

 Lots of good feedback here, but let's not forget who recommended that you hire a PM....your WIFE!

If something goes south, or if the management becomes too extensive, is she going to let you live it down?? If not, then hire the PM!  ;)

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