Real estate investors may, like many others, believe in the adage, “if you want something done right, then you’ve got to do it yourself.” Generally, that’s true, but at some point, a real estate investor may have too many properties that make the efficient and profitable overseeing of those properties, without the use of a property manager, next to impossible.
The twelve sure-fire signs that you need to hire a property manager to care for your investment properties are:
- You’ve brought an exterminator to the property on Peterson Street to fix an electric ceiling fan, and you’ve brought an electrician to the property on Peterson Avenue to eliminate a pest problem. Your little mental mix-up resulted in two relatively happy contractors, each of whom charged you for two house calls, and two bewildered tenants, wondering what happened?
- You’ve been so busy that you forgot to collect the rent in one of the properties you own, and now the tenant informs you that they’ve spent the money and will be late getting it to you.
- You don’t schedule the new delivery of home heating oil in preparation for the upcoming winter and your tenants are calling to ask you how to light a fire in their fireplace… their faux fireplace.
- You forgot to run a background check on a potential tenant, and they turn out to be serial evictees with a page full of judgments against them on their credit reports.
- You don’t panic when the phone rings at 2:00 in the morning, worrying that it’s a family emergency; instead, you mutter an expletive before you answer the call, knowing it’s a tenant with a property-related issue (and not necessarily an emergency).
- You feel bad about raising the rent, and guiltier still if you have to perform an eviction, because you allowed yourself to get caught up in the drama that is your tenants’ lives.
- You don’t have the time to inspect your properties on a quarterly basis, much less a monthly one, and the majority of the properties are less than an hour’s drive from your office.
- Your spouse and/or your kids are complaining that your tenants see you more than they do, and you’re neglecting the maintenance of your own property, because you’re exhausted from your handy-man duties.
- Several of your properties are vacant, and the word-of-mouth marketing scheme and the FSBO signs you planted on the front lawns are just not working.
- You have no idea what your local, state or federal landlord/tenancy laws require and whether or not you’re in compliance (“Tenancy law? What tenancy law?” and “Fair Housing Act? What’s that?”). Ignorance of the law is not an excuse.
- You’ve kept your repair receipts, invoices, insurance policies, tenant application forms and all property related documentation in a big box underneath your desk; at the end of the year, when you need your financial statements prepared, you hand the box to your CPA and he starts to cry.
- You’ve got no back-bone when it comes to confronting your tenants about NSF checks, noise related complaints from the neighbors and/or police, late rental payments and poor property upkeep. You put off the confrontation until you’ve mustered up enough courage, and then begin your conversations with, “Umm. I really hate to bother you…”
It’s true that no one will love your properties as you do, certainly not your tenant and probably not your property manager, but it is in your property manager’s best interests (after all, he does get paid to do this) to keep your interests at heart.Trust them to know the best way to maximize the income that your property can generate, while minimizing the risks of vacancies, non-paying tenants, property damage and loss of property values.
Let your property manager handle the (sometimes unreasonable) demands of the tenants, the middle of the night phone calls, the confrontations and the evictions.Your property manager will also have the responsibility of preserving and even enhancing your properties, through regularly schedule maintenance and landscaping , alerting you to potential problems before they become serious and costly, and handling the day-to-day minutiae that is so time consuming, such as collecting the rents, and paying the bills, utilities and taxes. When and if your property becomes vacant, the property manager’s role is to market your vacancies, help you to set your rental prices reasonably and fairly for the market environment, and run the background check on all potential tenants.
What’s your responsibility, as the property owner? Ultimately, everything is your responsibility; it is, after all, your property. Provided that you’ve chosen a competent, qualified and responsible property manager, though, you’ll spend less time involved in your properties, leaving you more leisure time to spend pursuing the things that you love. Really, wasn’t that the reason that you got involved in real estate investing in the first place, to have time to enjoy life?