Hiring the right property manager is a key to smooth property management. With the right property manager in place, you no longer face:
- The stress of answering tenant complaints
- Taking care of maintenance issues
- Interviewing prospective tenants
- Collecting rent, inspecting for damage
If you know anyone else with an investment property in your area, start by asking them for recommendations. If you don’t know anyone, jump onto the internet and start researching rental properties in your area.
Have a look at how they advertise their properties and how frequently they show up in rental listings. This will give you an idea of how hard they are going to work for you.
Call up at least 2 or 3 property managers in the area and tell them you have a property that you want managed. Have them send out their offers/applications to you and be sure to let them know that you are still in the process of deciding and that they will need to be competitive on commission.
The commission is normally a portion of the rent collected that is paid to the property manager for doing their job. A typical commission may be 8% but will vary depending on the competition in your area and how well you’ve negotiated.
Take Note: Commissions are negotiable so always try to get the best deal.
For example, if your property rents for $1000 per month, the property manager will take $80 for themselves as commission. This may seem like a fair chunk of your income, but it is well worth it to know that your property is being taken care of and you just have to sit back and relax as the rent rolls in.
Some people will decide to manage the property on their own, which is fine if you’re willing to put up with demands of it (and if you have a really good tenant, this may end up being a good choice). However, this becomes far less practical if your investment property is not close by to where you live.
The advantage of managing your own property is the money that you save, but the disadvantages are plenty. It is wise to let a professional look after your property as they have the knowledge, skills and understand the laws that restrict the way landlords and tenants can relate with each other.
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