Property Management - Do I Need A Property Manager?

In this episode, we dive into the essential question: Do I need a property manager? Join us as we explore the key benefits and considerations of property management with insights from the Mercer Hughes Real Estate Group Property Management team. Whether you’re an investor, a landlord, or simply curious, this episode will shed light on how a professional property manager can simplify your responsibilities, maximize your property’s value, and ensure your investments are well-cared for.

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Transcript

Hey, everyone, and welcome back. Today we're taking a deep dive into something that I think is going to hit home for a lot of you. You know, those of you who have thought about being a landlord or maybe already are, and you're managing your own properties. So we're talking property management. You know, leases and repairs and maybe even the occasional late night tenant phone call about something that just can't wait. So is it worth the hassle? Well, we've got a great blog post here from a real estate professional to help us figure that out. She shares some of her experiences. The good, the bad, and, yeah, the downright ugly. All to help you decide if hiring a property manager is the right move for you.

Yeah, you know, a lot of people, I think, really underestimate just how much work goes into properly managing a property.

Yeah.

You know, it's so much more than just collecting rent every month. It's about protecting your investment. It's about keeping your tenants happy and, you know, just navigating all of the legal and financial responsibility that comes with being a landlord.

Yeah, for sure. And this blog post that we're looking at really highlights that. Like, the author shares this one story about a landlord who was trying. Trying to sell a property, and the realtor shows up and the yard is so overgrown, it's like a jungle. And that's just the beginning.

Oh, wow. Yeah. I mean, that's a perfect example of what can happen when property management is neglected. You know, not only can it impact the value of the property, but it can also lead to unhappy tenants and, you know, even some legal issues down the line.

And get the. It gets worse. Inside, the place was a mess. Like, there was damage everywhere. Strong pet odor, just piles of junk. The owner had no idea things had gotten so bad.

Oh, no. See, that just shows you how important those regular property inspections are. And a good property manager, that's one of the things they're going to prioritize. Yeah, they're going to do routine checks, make sure things are in order. It sticks, any issues before they become, like, massive problems. You know, think of it kind of like preventative care for your property.

I like that. Preventative care for your property. Now, here's the real kicker. Both of the properties that the realtor saw that were in this blog post were rented to friends of the owners. No formal leases, no deposits, just a handshake agreement. You know, hey, we're friends. It'll all be fine.

Oh, yeah, I've seen that happen many times. You know, that friend factor is a Pretty common pitfall when it comes to property management. It can be really tempting to want to mix, you know, personal relationships with business, but it often ends up blurring the boundaries and makes it really difficult to enforce agreements. It can put a strain on the friendship and even lead to, you know, financial loss losses.

Right. It's like that awkward moment when you have to, like, remind your friend about rent and you're trying not to ruin the next game night.

Exactly. That's why you, even when you are dealing with friends or family, it's just crucial to have clear contracts. Keep that professional distance. It protects both sides and helps keep that relationship, you know, healthy, for sure.

So going the DIY route, you know, that can lead to those kinds of headaches that we've been talking about. What are the benefits of hiring a pro? The blog post lists a whole bunch of advantages, starting with setting competitive rental rates. It's like having someone with insider knowledge making sure you're not leaving money on the table.

Yeah, that's a big one. Property managers are plugged into the market. They have access to all this data. They can use that to figure out what the best rental price is for your property. You know, they're looking at location, amenities, even seasonal fluctuations in the market.

Oh, wow. So there's a lot more to it than just picking a number out of thin air, right? There's a strategy involved.

Exactly. Property managers understand how the market works, and they can help you find that sweet spot, you know, when you're maximizing your rental income but also staying competitive.

They also handle marketing and finding good tenants.

Right.

So no, more like posting blurry cell phone pictures on Craigslist, hoping for the best.

They know where to advertise. They know how to write really compelling listings that attract, you know, the right kind of renters. And they really know how to showcase your property's best features. I mean, you know, professional photos, virtual tours. You know, they really know how to target their advertising to reach the right people.

So, okay, let's say we've got some interested renters lining up. How does a property manager actually handle screening those tenants?

Well, they do a lot more than just a quick Google search. I mean, they're running background checks, they're verifying employment and income, they're contacting previous landlords to get references, and they're checking credit history. You know, they're really trying to find any red flags and make sure that this potential tenant is going to be reliable and a good fit for your property.

So they're really taking all the guesswork out of the equation. No more wondering, did I pick the right tenant?

Exactly. You know, they're taking all these steps to minimize your risk. Yeah. And make sure that you've got reliable tenants who are going to take care of your property.

Okay, let's talk about something that I think keeps a lot of landlords up at night. Maintenance and repairs. How does a property manager help with all that?

Well, the good thing is they have a whole network of trusted contractors and vendors that they can call on for everything from plumbing to electrical work to landscaping. And because they work with these professionals all the time, a lot of times they can negotiate better rates. So that ends up saving you money in the long run.

So no more like scrambling to find a plumber in the middle of the night when a pipe bursts.

Exactly. And it's not even just about emergencies. You know, property managers understand that regular maintenance, that's key to preventing those big, expensive problems down the road.

Yeah.

So they're going to schedule those routine inspections and catch those small issues before they become massive headaches.

That peace of mind alone, I bet that's worth its weight in gold for a lot of landlords out there. No more weekends, you know, fixing leaky faucets.

Exactly. You know, having someone to handle all those tasks efficiently, effectively, can really free up a lot of your time and energy.

All right, so we've covered marketing, finding tenants, handling maintenance. What about, like, the less glamorous side of things, Rent collection? I'm guessing they handle that, too.

Oh, yeah, definitely. They're going to collect rent on time, enforce late fees when necessary, and keep meticulous financial records. They might even set up online payment systems to make the whole process seamless and transparent for both you and your tenants.

So no more awkward conversations, no more chasing down late rent checks, Right? That's a win.

It's about streamlining that whole process, making sure your cash flow is consistent, taking those day to day hassles off your plate so that you can focus on the bigger picture.

Okay, what about those situations where things go south and you have to think about evicting a tenant? I mean, I'm guessing a property manager can help navigate those tricky legal waters.

Definitely. You know, they're very familiar with all the landlord tenant laws. They know how to handle evictions. That's right. Legally, ethically, they're going to follow the proper procedures, minimize your risk, and make sure the whole process is handled fairly and correctly.

It sounds like they're taking on so much of the stress and responsibility of being a landlord, but I'm sure the big question for a lot of people is, is it worth the cost? We're talking about, you know, 8 to 10% of the monthly rent, right?

Yeah, that's the typical range, but it can vary depending on the services that are included and also, you know, the specific property itself. It's important to remember that you're not just paying someone to collect rent. You're paying for their expertise, their peace of mind, and also the potential of saving yourself from some pretty costly mistakes down the line.

It's really about weighing those costs against the value that you're getting in return. It's not just about the fees. It's about how much time you're saving, how much money you're saving, and, you know, even how much stress you're saving.

Exactly. And that's actually something we can dive into a little bit deeper. You know, we can explore some of those financial considerations in more detail, talk about what factors might affect the cost of hiring a property manager, and help you determine if it actually makes sense for your own situation.

I like it. Sounds good.

So stay tuned.

We'll be right back. Welcome back. So before we went to. Well, we didn't really go anywhere, but before that little pause, we were talking about, you know, the cost of hiring a property manager and whether or not those fees are worth it. I think it's really easy to get caught up in that 8 to 10% of monthly rent number. But like we were just discussing, there's so much more to the equation.

Yeah, it's definitely important to look at the big picture.

Yeah.

You know, think about the potential return on that investment. Like, are you actually saving yourself time and stress? Are you avoiding those costly mistakes? Are you really maximizing your rental income? Those are the kinds of questions you want to be asking yourself to figure out if a property manager is a good fit for you.

So let's break down some of those potential cost savings a little bit further. Like we mentioned before, that property managers have that whole network of trusted contractors and vendors, and that often means that they can get better rates on those repairs and maintenance.

Right. Because they work with those professionals so often, they've often been able to negotiate discounts or preferred pricing that you wouldn't get as an individual landlord.

Yeah.

This can save you a ton of money on everything. Plumbing, electrical work, landscaping, appliance repair.

It's like a built in discount program. Just for being their client.

Exactly.

I like it.

And you know, even beyond those direct cost savings, there's also the value of their expertise. Property Managers know which contractors are reliable, who does good work, who's going to respond quickly in an emergency. That can save you a lot of time and hassle, especially if you're not, you know, super handy yourself.

Right. It's like having someone you trust to just take care of those situations efficiently, effectively. No more spending hours researching different contractors, worrying about getting ripped off.

Exactly. And, you know, remember, preventing a problem is almost always going to be cheaper than fixing it. Property managers are proactive about maintenance. They're going to schedule those regular inspections, catch those small issues before they turn into, you know, big, expensive repairs. That alone can save you so much money in the long run.

Yeah. They're really looking out for your property as if it were their own. They're invested in keeping it in good shape, which obviously benefits you and your tenants.

Exactly. And you know, that proactive approach that also extends to tenant management, they're going to be screening those tenants carefully, addressing any concerns, quickly, enforcing the lease agreement. All that helps to reduce tenant turnover.

Yeah.

Minimize vacancies, and ultimately, you know, protect your investment.

It sounds like hiring a property manager is almost like an insurance policy for your property. They're there to help you avoid those worst case scenarios and just make sure everything runs smoothly.

Yeah, that's a great way to think about it. They're really mitigating your risk.

Yeah.

Both financially and in terms of, you know, your time and energy.

So let's shift gears a little bit here and talk about some of the factors that might actually influence the cost of hiring a property manager. Is it always that flat 8 to 10% fee, or are there other things that come into play?

So while that range is definitely common, it definitely fluctuate based on a few things. Location of your property is a big one. Areas with higher property values or more competitive rental markets, those tend to have higher management fees.

That makes sense. Supply and demand, Right?

Exactly. Also, the type and size of your property is going to play a role. You know, managing a single family home.

Yeah.

That's generally less complex than managing a large apartment building. So the fees might be a little lower for a smaller property.

So if you're just starting out with, you know, one small rental property, you might be able to find a property manager with a more affordable rate.

Right. And then also, the level of service that you need can impact the cost. Some property managers offer like a basic package that covers the essential tasks, rent collection, maintenance, coordination. But then others provide more comprehensive services that might include things like marketing, tenant screening, legal support.

It's like a menu of services. You can pick and choose what you need.

Exactly. So it's really important to have a conversation with any potential property manager, understand what services they offer, how they structure their fees, what's included in the management agreement.

So it's really about finding the right fit for you, your needs and your budget.

Right. And don't be afraid to shop around. Compare different property management companies, get some quotes, ask for references, do your homework. Make sure you're choosing someone you trust, someone who aligns with your goals as a landlord.

So we've talked about the cost, the benefits, some of the factors that influence the fees. Ultimately though, the decision of whether or not to hire a property manager, that's a personal one. There's no right or wrong answer. What advice would you give to someone who's maybe on the fence trying to weigh their options?

I think you really need to honestly assess your own skills.

Yeah.

Your time commitment, your risk tolerance. Like are you comfortable with handling tenant communication, dealing with repairs and maintenance, navigating the legal side of being a landlord, or would you rather have a trusted professional handle all of that for you?

It's about being realistic about what you can handle and what aspects of property management might be too overwhelming or stressful.

Exactly. And, you know, think about your long term goals as well. Are you trying to grow your real estate portfolio? Do you have other business ventures or personal commitments that require a lot of your time? Hiring a property manager could free you up to focus on those things. Well, knowing that your investment property is being taken care of.

Right. It's really about understanding how a property manager fits into your overall strategy and whether they can help you achieve your goals more efficiently, more effectively.

Exactly. And remember, even if you decide to go the DIY route, you know, initially, you can always revisit that decision later on. Life changes, circumstances evolve, and sometimes it just makes more sense to bring in some professional help.

Flexibility is key. What works for you today might not work for you down the road. The important thing is to make an informed decision based on your individual needs and circumstances.

Absolutely. And you know, if you are leaning towards hiring a property manager, take your time to find the right one. Do your research, ask for recommendations, interview potential candidates, make sure they're a good fit for you and your property.

It's like any other important business decision. You want to do your due diligence. Make sure you're partnering with someone who shares your values and understands your goals.

Right. And don't be afraid to ask questions. A good property manager is going to be transparent about their Services, their fees, their approach to managing your property.

Yeah, it's really about building that strong and trusting relationship where you feel comfortable communicating openly and working together to make that investment a success.

Exactly. It's a partnership. And finding the right property manager can make all the difference in your experience as a landlord.

Couldn't have said it better myself. Welcome back to the Deep Dive. We've been talking all about property management, you know, the good, the bad, and the ugly of trying to do it all yourself and the potential benefits of hiring a professional.

Yeah, it's been a really great conversation, and I think we've covered a lot of ground. You know, the practical stuff like screening tenants and handling all that maintenance, but also, you know, those financial considerations and what affects the cost of hiring a property manager.

For sure. And we even touched on some of those emotional aspects of being a landlord. You know, especially when things don't exactly go according to plan. That blog post from the realtor that we've been talking about really brought those challenges to life.

Yeah, it did. You know, it's easy to think, oh, passive income, that sounds great, but, you know, being a landlord can be really demanding and even stressful at times. Hiring a property manager can definitely lighten that load, give you a little bit more peace of mind.

Right. It's like having someone there with you who really gets it. They understand how the rental market works. They can help you through all those tricky situations, whether it's dealing with a difficult tenant or, you know, figuring out some complicated legal issue.

Exactly. They're there to protect your investment, advocate for you, and just make sure that everything is handled professionally and ethically.

So as we wrap up our Deep Dive today, what are some of the key takeaways that you hope our listeners are walking away with?

Well, first, I'd say it's really important to remember that being a landlord is a business. And just like any other business, it takes time, it takes effort, it takes expertise. If you're not ready to invest all of that, or, you know, if you're just feeling overwhelmed by all the things that come with property management, then hiring a professional could be the best decision for you.

Yeah, it's about being honest with yourself about what you're good at, what you're not so good at, and how much time and energy you're really willing to put into managing your property.

Exactly. The second thing I would say is don't underestimate the value of experience and expertise. Property managers have seen it all. You know, from small maintenance issues to, you know, major legal battles. They know what to do when things get tough. They can negotiate, and they know how to protect you.

They're like that seasoned advisor in your corner. You know, they can see those problems coming and they just guide you through everything.

Exactly. And then finally, I would say remember that hiring a property manager is an investment, not just an expense. It's about maximizing your income, protecting your property, and reaching your goals as a real estate investor.

It's about having that partner who gets what you're trying to do and can help you make that investment as successful as possible.

Right. And like we talked about before, it's important to find the right property manager for you. So do your research, ask around for recommendations, interview people. Make sure you feel good about the person you're trusting with your investment.

For sure. It's like any other big business decision. You want to do your homework. Make sure you're working with someone who, you know, shares your values, understands what you're trying to achieve.

Yeah, absolutely.

We've covered a lot of ground today, but hopefully our deep dive into the world of property management has given you some good insights and some practical advice. Whether you decide to tackle it on your own or bring in a pro to help you out, we wink you all the best on your real estate journey.

Yeah. Thanks for joining us. We'll see you next time on the deep Dive.