Do You Need a Property Management Company? Answer These Four Questions to Find Out

You may have decided that the services of a property management company is an unnecessary expense, and you could be right. Not every landlord needs a professional firm to manage their portfolio, but there can be a lot of advantages in certain scenarios. Consider your answers to the questions below as part of your process for determining whether it would be advantageous to use a property management administration company for your rental properties.

1. Are you experienced in property management?

If property management is your primary business, then it’s likely you’ll build up experience as you go. But the learning curve can be steep and mistakes can be costly. There are legal pitfalls, reputational issues and consequences to, for example, not being able to fill vacancies promptly or with the right type of tenant. All these can eat into the income you can expect from your investment. Balance your experience and time available to learn the ropes, and whether this is your full-time job or something you’re doing on top of another career, and you may find appointing a firm with expertise in-house is the better option.

2. Is your property located within easy travelling distance?

The further away you live from your investment property, the harder and more time-consuming its management will be. If you’re finding you are spending increasing amounts of time on the road travelling between your home and your rental property, then it could make sense to hire an agent to do the legwork. Not only will you save time and money on travel, but it will also be easier for them to source new tenants, respond to emergency calls for repairs in a timely fashion and collect rents, service charges and ground rent, for example.

3. Do you own multiple rental properties?

The larger your portfolio, the more complex its management becomes. The day-to-day administration can be harder to keep track of, and the number of vacancies, maintenance issues and paperwork you will have to deal with. Matters become especially involved if your portfolio is spread over several sites. Property management companies are more likely to have greater resources, a network of contacts and streamlined procedures to help them cope with this than individual landlords, so hiring such a company may make sound business sense.

4. Are you a hands-off or hands-on landlord?

Some people dislike relinquishing control and like to keep a close eye on the daily value of their investments. Others may find confrontation unappealing. What, for instance, is your appetite for dealing with your tenants if complaints come in or the rent isn’t paid? A good property management company will deal with everything from the routine, like collecting rents and service charges, to the out-of-the-ordinary, such as handling vexatious complainants, chasing debtors and so on. If you decide to go down the property manager route, ensure you find a management company that will be transparent about its operations on your behalf. That way, you can be sure you know as much – or as little – as you want to know about the management process.