Should You Hire a Property Manager For Your Rentals?



You’ve navigated the confusing world of real estate to buy a rental property, and now you are the proud owner of an income producing asset.

However, all of that time, money, and work could be jeopardized if you don’t manage the property correctly. Therefore, an important question for any investor is: Should I take on this valuable role myself or hire a professional property manager to do it for me?

The response to this question is another one of those “there is no right answer, but there may be a right answer for you” kind of questions. Every person has different skills, personalities, and time availability. The purpose of this post is to help you make the best choice for you and your family.

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Role of a Property Manager

First, let’s talk about what a property manager actually does. But even that is tough to give a straight answer about! You see, property managers do a wide variety of tasks depending on the manager and the owner they will be working with. However, most of the time a property manager will:

  • Advertise vacant units
  • Screen applicants
  • Approve tenants and sign leases
  • Handle phone calls from tenants
  • Schedule maintenance issues
  • Issue late notices
  • File eviction if needed
  • Keep a record of income and expenses
  • And possibly pay your property’s bills, depending on the manager

Related: The Big List of Roles Property Management Companies Need to Fill Expertly


In addition to these tasks, property managers also offer numerous other benefits:

  • A property manager can clear up your day, allowing you to spend more time with family, friends, or your day job.
  • A property management company will have the infrastructure in place to handle your rental, including office staff, paperwork, and signage.
  • A property manager will have a reliable set of contractors to work with and benefit from volume pricing.
  • A property manager will give you more time to look for other deals, helping you focus on just the tasks that bring in the most money for you.
  • A property manager will have a lead system in place for attracting potential tenants. People will know their name, recognize their signs, and call without them even needing to advertise your property.

Sounds like a dream, right?

Property management can be a powerful thing, allowing you to work on your business rather than in it. 

However, management does come at a price. Let’s talk about a few of the disadvantages.

Disadvantages of Property Management


Although the price for management will depend greatly on where you live, management is usually in the 8-10% range, plus a fee when a new tenant is moved in, usually between 50% and 100% of a month’s rent.

In other words, if the rent on your property is $1,200 per month, you might pay $120 per month, plus $1,200 every time a unit is turned over. Furthermore, some management companies charge a “renewal fee” each year, even if the tenant doesn’t move. Clearly, the expense of a property manager can be a huge drain on your cash flow and something that must be budgeted for.

For example, let’s look at the numbers on a sample property.

123 Main Street is a 3 bedroom home that you purchase for $100,000 (with a $20,000 down payment), and you now have a mortgage payment of $500 per month. When you ran the numbers, you found that all the expenses (taxes, insurance, maintenance, cap ex, vacancy, etc.) came to $400 per month on average, over time.

This means your total expenses on the property would be $900 per month. If the home would rent for $1,100 per month, you are looking at about $200 per month in cash flow, or $2,400 per year. On your $20,000 investment, this is a 12% cash on cash return on investment.

Not too bad, right?


Now, let’s factor in property management.

If your local management company charges 10% of the rent, that’s $110 per month. Your $200 per month in cash flow has now dropped to $80 per month, or $960 per year. On your $20,000 investment, you are looking at a cash on cash return of just 4.8% now, a huge difference than what you thought you would be getting.

However, is that difference of $1,320 per year in cash flow worth it for you?

Could you invest your time elsewhere now to make a better return?

Or are you better off self-managing and keeping that extra income?

These are questions you’ll need to ask yourself.

No One Cares Like You Care

The fact is: No one will care as much about your property as you do.

Your property manager will likely have hundreds, if not thousands, of properties to manage. Yours will not be special.

When a potential tenant walks through their door, they have no incentive to show your property over another.  They won’t be able to drive over to the property and check it out as much as you might. It’s not that they don’t care; it’s just that you are one in a bunch.

Case-in-point: I used property management on just a few properties that I own, as an experiment.

Recently, the tenant called the company and said that their gutters were getting detached from the roof on one part of the house. The property manager got a bid from their main contractor to get it fixed, and the bid came in at $1,200.

Now, I’m no Handy Manny but even I knew that fixing this gutter problem would require a few screws and maybe one hour of work.

So $1,200?!

Someone was getting ripped off.

I told the manager to get a second bid from someone else. The second bid? It came in at $115, and they took care of a few other issues while at the house. Now, had I not encouraged the second bid, the property manager would have blindly accepted the $1,200 price tag because they don’t care like I care. It’s not coming out of their pocket, so they don’t have the incentive to dig into the bid to know if they are getting ripped off or not.

Therefore, if you end up hiring a property manager, understand that your job is not 100% passive. You will still need to manage the manager and stay on top of them to make sure they are doing what they are supposed to do. Don’t assume property management means you can forget about the property and just collect checks.


Property Managers Kinda Suck

Okay, maybe not all of them.

But I would venture to say most property managers are pretty terrible. Of course, if you begin managing your properties, you’ll likely be terrible also. But because it’s your property, you’ll learn and grow quickly from the “on the job training.”

Therefore, if you are going to use a property manager, just remember: Most of them suck. You need to find the one that doesn’t.

A property manager will be one of the most important members of your team, so it’s imperative you invest the time upfront to find the right one. Treat it like a job interview. Get referrals and actually talk with those referrals!

Ask hard questions to the property manager in an interview. Don’t settle for mediocre.

If you are going to trust the most significant investment in your portfolio and the key to your family’s future wealth to someone, shouldn’t you do your homework up front?

Related: The Not-So-Obvious Reason Your Property Management Company is Failing You

Property Manager Interview Questions

When you sit down with the property manager, I would recommend starting with the following questions:

  • What are your management fees?
  • How do you communicate with owners? How frequently? What about?
  • How many properties do you manage?
  • How long have you been a property manager?
  • Am I locked into a management contract with you? If so, how does that work?
  • How many evictions do you have each month?
  • What kind of reserve does your company require?
  • How long does a typical tenant stay in a property?
  • How long do properties usually stay vacant before being rented?
  • How do you screen tenants?
  • Do you accept people who have had an eviction on their record?
  • How do you handle maintenance requests?
  • Is there a minimum charge for a maintenance visit?
  • What do you do if a tenant doesn’t pay rent?
  • How do you market vacant properties?

These questions should serve as a starting point for conversation, but don’t let it end there. Dig in on each point until you truly understand the kind of manager they are. Write down each answer so you can review them later, and compare your notes with other property managers (because, of course, you should be interviewing more than one).


So… Should You Hire a Property Manager?

I wish I could tell you a simple answer as to whether or not you should hire a property manager or do it yourself.

But I don’t know you.

You might be a terrible manager.

You might be really busy.

Or maybe you’ll be great.

However, I can say this: Managing tenants is not as difficult as it might sound IF you treat it like a business. This means continually learning, growing, networking, etc. It means having systems in place to handle problems. It means always trying to improve.

So what do YOU think? Should investors use property managers? Have you?

Please share your comments below!

(And… of course… don’t forget to share this article on your Facebook and Twitter if you think others might enjoy it!)

About Author

Brandon Turner

Brandon Turner (G+ | Twitter) spends a lot of time on Like... seriously... a lot. Oh, and he is also an active real estate investor, entrepreneur, traveler, third-person speaker, husband, and author of "The Book on Investing in Real Estate with No (and Low) Money Down", and "The Book on Rental Property Investing" which you should probably read if you want to do more deals.


  1. Mike Webb

    Awesome points, Brandon. My philosophy is to manage our own units until We hit 10 units (we have 4 right now). This approach is two fold: first, we will learn by doing so we can understand what is involved with day-to-day management; therefore, able to manage the manager better. Second, in my market, at 10 units is when most management companies reduce their fee from 10% to 8%. We intend to be able to Segway to management by the end of next year!

  2. Wilson Churchill

    My thinking on this is to self manage until 30 to 50 units, then hire an employee to which you can delegate tasks. At that point, it would be less expensive to have an employee than to pay 8 to 10% of gross rents, and this allows for greater control.

  3. Ashley Wishinski

    Hey Brandon,
    Great post. I agree that there is a ton to learn while managing your own properties – but it can get to be overwhelming pretty quickly… Before we started our property management company – we were managing our units on top of our full time jobs. It was a lot to handle and got to a point that for us, it made sense to open a property management company and leave our jobs to help others manager their investment properties. We pride ourselves in being ethical and diligent. And we’ve saved our clients money when they find quotes that are way outrageous… I think it is a huge bonus when property managers own investment real estate themselves. So yes, there are bad apples in every field. But there are also a lot of honest people who work really hard for others’ interests. : )

    • Ashley Wishinski

      A quick after thought: This makes me think about financial advisors… Would you prefer not to work with a financial advisor because they won’t be as diligent as if it were their own funds? Seems like working with an expert can have great benefits for clients whether it’s financial advising or property management.

    • Jesse Barron

      Not only do we own our own properties as well, we are real estate financing experts.

      When they’re interested, we are able to show clients how to do more, with less, faster.

      I have not sat down to analyze it, but I would not be surprised if there are clients making more than they’re paying us because of a few tricks we’ve made them aware of.

      We talk the talk and walk the walk.

  4. Mike McKinzie

    I think the WEAKEST argument against Property Management is when someone argues “no one cares about your property as much as you do.” While this sounds like a valid argument, it leads to failure all too often. No one cares about your physical body more than you but I bet you go yo a doctor when there is a problem. No one cares about your car as much as you but I bet you take it to a mechanic when it breaks.
    How many ‘investors’ buy one property and give up within the first year or two? MILLIONS! And the number one reason they give? MANAGEMENT HEADACHES! A poorly calculated rental can still be productive if managed correctly, but the best calculated rental can fail if managed poorly!
    So unless you are a master handyman, interpersonal relationship guru, and legal eviction specialist. Let someone else manage your rental, and don’t try to re-invent the wheel. Use your time to find more rentals.
    As for finding a good Property Manager, that is an in depth topic discussed elsewhere on BP.

    • Shaun Reilly

      Love this Mike!
      It is so true, plenty of things people use professionals for so why should managing property be any different.

      I also have to say it would be pretty amazing if I could find a manager that cared about my property less than I do. I hate those things… I like the money though… so having someone else deal with all the BS then send me a check is pretty nice.

    • Luis Melendez

      I know this is andrew old post mike but i think you helped me make a decision. I currently have a management company but they are getting out of the business so i was thinking of managing myself. But with my full time job and how busy it can get i was in the fence. But your right my skills are finding properties analyzing them andrew putting the deal together. Not managing it. I Appreciate the input. Great advice!!!

  5. Thomas Mark

    I feel you just have to know yourself and what your tolerance level is. Personally I do not like dealing with people and getting calls about random issues from a tenant. My time is worth a lot to me and at the moment I prefer a manager to take 10% of the gross rents. The more properties I acquire then that may change, but for now I consider my property manager a partner in this wealth building process. I have been very lucky to have a manager who does an descent job. Always remember your time/stress is worth something and as an individual you have to decide how much that is worth.

    Just my two cents….

  6. Ryan Donahue

    This is great Brandon thank you for the post and advisement to really ask as many questions as possible and to push for solid answers. I am for at PM’s in the NOLA (New Orleans) and this will make my interviews much more effective. Looking for a PM is really my only option as my main residence is in Los Angeles.

    Keep up the good work.

  7. Dmitriy Fomichenko

    It’s a very personal choice. If someone has a full-time job, managing a property would be the last thing one would look forward to. However, if the plan is to quit after reaching a comfortable monthly rental income, managing your property might be possible. The problem comes in with major repairs, and considering an average skill set, most of the homeowners won’t be able to see through them, ending with independent contractors for the same, which could be expensive. With property management companies, they enjoy volume pricing and you will end up with a lower repair bill.

    Just like you said, if one has great management skills and is ready to create a system, self-managing may work out fine. However, you will simply replace your day job with another one.

  8. My friend was thinking about buying his own rental property, and he knows that he won’t have enough time to manage it. I really like that property management can actually help screen applicants before they come. It sounds like if he does go through with his plans, he would need someone like this.

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