If you are planning to buy a rental, you need to determine whether you would be a DIY landlord or you would hire an agency to manage the property. Your friend who owns a rental may have hired a property manager, but it may not necessarily be the right choice for you. Actually, which one of the two options you should choose depends on your individual circumstances. Here are a few important considerations for you to make before taking a decision in this regard:
Distance and time
If your primary residence is too far from the location of your rental, then you would definitely find it difficult to respond quickly to possible emergencies and carry out various other tasks like collecting rents and sorting out any issue that the tenants may have from time to time. Commuting to the property from your primary residence will also be time consuming. Needless to say, you can save time and money by hiring a property management agency in such a situation.
Another thing to consider is if you have enough time to manage the property on your own. If you’ve a full time job, it may be difficult for you to deal with various responsibilities related to property management.
Number of units
It’s easier to manage a couple of units. But, if your rental property has multiple units, then it may be difficult for you to cope with day-to-day maintenance and other issues. Moreover, if you have two or more rental properties in different locations, your responsibilities will increase considerably.
Cost of property management
Depending on the number of units in your property, you may need to pay anywhere between 4% and 10% of the monthly rental income to the property manager. For a single family home, the fee may be almost 10%. You would need to determine if you can afford a property manager.
If your property is situated in a place that is not very popular among renters, then you may probably have a high vacancy rate. Hiring a property management agency can be a right choice for you in such a case because the agency can help you market your property on the right platforms and find tenants.
If you decided to manage the property on your own, you would need to hire services of professionals like contractors, electricians and plumbers to take care of the maintenance issues. These people should be trustworthy and be able to respond quickly whenever you need their assistance. If you find it hard to deal with these people, then hiring a property management agency may be the right choice for you.
Just because you are new to property investing, you don’t need to panic. Remember, you need to evaluate your individual circumstances. If you’ve a strong desire to learn and like to accept challenges, the chances are you would be able to manage a rental on your own.