Should I Hire A Property Manager?
William Shakespeare wrote a few famous lines in his time, though perhaps none more memorable than Hamlet's immortal words: "To be, or not to be".
We're pretty certain that if the depressed Danish prince had been preoccupied with less philosophical matters, that line may have gone something like: "To hire a property manager, or not to hire a property manager".
It's a question for the ages, and one that each first time investor in rental property needs to grapple with.
So will a property manager be a tower of strength or will you forever be asking wherefore art thou rent?
The case for hiring a property manager
One thing that anyone managing a rental property will tell you is that it can be a lot of work.
While you probably have many other duties and responsibilities, property management professionals look after rental properties full time. It's their job and has their undivided attention.
They can save you time and effort by taking the helm and relieving you of the many different duties that a landlord or property owner would normally need to attend to.
This includes advertising for tenants, screening applicants, running viewings and preparing the lease when you have selected your preferred candidates.
Once your property is tenanted, the duties of your property manager are far from over.
They'll handle all liaisons with your tenants, including all money transactions (deposit, rent, late fees), respond to any issues with the property and arrange repairs if necessary.
Property managers bring experience and know-how to the table that can prove real assets in the management of your rental property, including comprehensive knowledge of tenancy rules and perhaps even established relationships with local repairers and contractors that get you good rates, reliable service, or both.
While as a new landlord you could be in for some surprises, and even shocks, their experience will mean there isn't much they haven't seen – and handled – before.
Additionally, by employing someone else to manage your property, you needn't be on hand or in the area at all times. This can liberate you to travel or live in another area while retaining peace of mind that if an issue were to arise with a tenant or your property, it can be seen to in your absence.
The case for doing it yourself
Being professionals, property managers charge for what they do, and their fees will come out of your rental income.
As a property owner, you will therefore need to assess the short and long-term benefits of paying for property management.
You may decide that you don't mind taking the reins yourself simply because it means you don't have to give up a percentage of your rental profits.
The other main argument against hiring a property manager is that you may not want to relinquish control.
Some investors like to be involved in the day-to-day management of their properties, and enjoy dealing with people and helping to resolve issues that arise.
Tips for first time investors
Just as you would compare investment loans, it is a good idea to seek out several property management companies for comparison if you are thinking about hiring one to look after your rental dwelling.
By going to see them in person, you can do a bit of homework to find out what is included in their services, what you can expect as an owner when dealing with them, and most importantly, how much they charge.
The potential costs of property management are something more to take into account when planning for your rental investment.
Just like other costs such as insurance and renovations, be sure to discuss these with your mortgage broker so that they can help you find an investment loan structure that is the right fit for what you hope to achieve.