If you’ve recently inherited a property, you’ll quickly realize that it’s no walk in the park.
If you chose to rent, it’s up to you whether you want to manage the property on your own, or hire someone else to manage it for you. Managing a property requires a lot of work. If you already have a full time job and a family, you may not be able to take on the job. In that case, you’re better off hiring somebody.
Consider What You Need
When determining whether or not you need a property manager, there are plenty of considerations you’ll have to make.
For the most part, the list is short and simple.
- Is the property close enough to where you live that you’ll be able to visit it regularly to maintain it and check in with tenants?
- Do you have the amount of time necessary for the upkeep of the property?
- Do you know how to advertise a property, and keep it filled with tenants?
- If you do, are you comfortable with your understanding of how landlording works?
If you aren’t up to it, hiring a property manager will make things easier.
Maximizing The Property’s Rental Value
When you’re looking to rent your property, you obviously want to make sure you’re getting top dollar. You want a home that tenants will be happy to live in, and you want to be able to charge a decent monthly rate.
What does this have to do with a property management company?
A lot, actually.
You have two options relating to this situation.
- You can either fix it up by yourself
- Or find a property management company that includes renovation as part of their services.
It may dig into your profits to hand things over to the property management company, but it will save you a lot of work. If it’s a found property and a found income anyway, you won’t technically be out anything.
What Does a Property Manager Do?
As far as the basics go, a property manager will find you acceptable tenants, keep in touch with them, and collect your rent for you. Most of the time, this also comes with a simple list of basic maintenance and inspection services.
Property managers take anywhere between 8 and 10 percent out of the rent. Some property management professionals prefer to work for a flat monthly rate. Any expenses they incur while managing your property, such a fixing something that’s broken or hiring a lawn service, will be passed on to you.
Hands-on property managers will be inspect your property for signs of damage. They’ll inform you of what’s going on, the get damage fixed, and send you a bill. Some property managers will only keep the books and report to you. You’ll be responsible for doing everything else.
Picking The Right Candidate
If you just want a bookkeeper who will check on your tenants every so often, it’s easy to find one. Research reputations and check out testimonials.
For a full service firm, things change a little. You need to know how they keep track of their properties. If they’re dealing with a ton of properties, you need to know yours won’t fall through the cracks. You’ll also want to know what they’re offering you in terms of maintenance, and what contractors they use.
Most of the time, property managers will have deals set up with contractors that will come in to repair or renovate your home. When you’re choosing a property manager that offers a complete host of services, you’ll also want to check the reputation of their contractors.
Spend some time talking to the property manager and make sure you’ll get along well. You’re going to have to communicate with this person a lot. The right candidate will be easy to talk to. You’re entrusting this person with a big job, and personality compatibility is important.
Reviewing a Property Management Contract
Before you sign on the dotted line, you need to understand what you’re reading.
What exactly does your agreement include?
A management firm may have been quick to tell you everything they can do for you, but how much of that is included inside of the set price agreement?
If you’re going to pay extra for some of the work they do, you’ll need to know what is and isn’t covered to make sure you aren’t racking up a bill without realizing it.
Review the termination clauses.
What happens if you no longer need the services of a property manager, or you decide you’d rather work with someone else? The fine print may tell you that you’ll have to buy out the contract.
This is pretty standard, but at what cost does it come?
If you aren’t comfortable with the contract, your best bet is to attempt to negotiate. If that doesn’t work, you may want to find another firm. Contracts are serious business, and you should never sign one unless you feel certain in your commitment.
If this whole process sounds like more trouble than it’s worth, there are always alternatives to dealing with your inherited property you may like to know about.