Like many types of investing, real estate investing can be as hands-on or hands-off as you would like it to be. Many real estate investors hire managers to manage their properties for them, but there are some pros and cons to doing so. Here are three pros and three cons of hiring a property manager.
Keeps you from having to be available to solve problems 24/7: When renters have a rental property issue, it is often the owner’s responsibility to get it taken care of. In some cases, quick action is required to minimize property damage. Hiring a property manager means you don’t have to be available whenever there is a crisis.
Can save you a great deal of money: There are many problems a good property manager can solve themselves, which keeps you from calling in professionals who charge for service calls whenever there is an issue.
Allows you to invest in more properties: Managing just a single property can be almost a full-time job in and of itself. The more help you have managing properties, the more properties you can invest in.
Not all property managers are good property managers: A good property manager can help keep you in touch with what is going on with tenants and even act as a middleman to maintain good relationships with tenants. Other property managers, however, may engage in activities that can not only damage your relationship with tenants but can even land you in legal trouble.
Can eat into profits: Needless to say, property managers don’t work for free. If you end up spending too much on property managers, you may actually end up paying more to have your properties managed than you are bringing in from rental income, particularly in a depressed market.
Managers are not owners: The greater your investment in something is, the better you tend to take care of it. People that do not own things (and therefore pay for them) do not tend to treat things the same way as the people that own them and pay for them. It doesn’t mean you can’t find a great property manager; it just means no property manager will probably ever manage a property with the same care that an owner will.