The rental property business is a great way to invest in real estate, such as capital gains, rental income, and tax shelter for your deductions. Hiring a property manager may be an option that has come up in your investment business, but you might not be sure if you want to take that next step. Here are some tips to help you know when to hire a property manager to handle your rental business.
Your Rental Property is Not in Close Proximity
When you are managing all the daily, weekly, and monthly tasks of your rental property, you may want the property to be within close proximity to where you live and work. However, not every rental property market is going to be close to your home, so you may end up having to drive a long distance to oversee rental work or meet a potential renter for a tour and an interview. So, if your rental property is a 30 minute or 2-hour drive from your home, this can cut quite a bit of time out of your personal schedule.
If you get an overnight or weekend call from your tenant that there are plumbing problems and the sewer is backed up or the water heater is broken, you will need to handle the problem immediately. But if you live too far away, a property manager can handle the management of the issue instead. A rental property manager will be able to show your rental property or even hold an open house, then handle any tenant issues and maintenance and repairs all while you go about your personal life.
You Have Good Cash Flow
A property manager is not going to provide you their professional services for free, so you need to make sure your property's income will cover the management fee. A property manager will usually take a small percentage of your monthly rent and usually add a rental finder fee. But if your rental property is bringing in a positive cash flow, which means it's a good investment, the income on the property will pay for the management costs.
As you search for a good rental property to invest in, calculate a maintenance fee as part of the property's costs in your cash flow analysis. Then, you will have the funds upfront and the knowledge that your property can be expertly managed at no additional stress to you. Contact a property management company for more information.