When to Hire a Property Manager
Hire a Property Manager when it comes at a Cost
Every landlord wants to look at their bottom line and feel confident that on a month-to-month basis they will make the funds necessary to sustain their rental property and line their pockets with profit. Finding tools to make your landlording more efficient can be an important part of stretching the ability to make that happen.
Yet, time is money and making sure that a landlord is making their time handled efficiently while leveraging tools available to them is what every landlord should be trying to obtain. So, deciding when that time is appropriate is the key.
Let’s discuss what time is necessary to handle landlording efficiently and when it’s time to hire a property manager :
What Rent Collection Systems are being used as a Landlord?
This day in age, there are plenty of rent collection options that landlords can consider prior to hiring a property manager.
Providing tenants options to paying rent can be a critical component to making timely rent collection and leveraging your time and ability as a landlord. Popular rent collection software includes :
At the end of the day, these softwares provide the ability to have your tenant pay timely and even offer the ability to pay by credit card (should funds be running short).
Perhaps most importantly, offering an easy bookkeeping software would be another important feature. Having to prep for the annual tax return is never fun and having systems to make this easy and fun are key.
Make Your Landlord Repair Systems Foolproof
The days of having your tenant call you directly and/or texting you to make timely repairs is no longer necessary. There are call centers utilized by property managers and landlords can utilize similar systems based upon a time/value analysis.
Naturally, use of a repair call center will be necessary relative to the number of units owned. So, the next best step is to setup a Google voiceline that can direct calls to a trusted contractor that can dispatch calls upon emergency.
Another option would be to look into a Virtual Assistant. While this would be another option that could be based upon a larger number of units and would require an hourly cost, this cost would be marginal and can provide a more personal approach to residents.
Regardless of the means in which you setup a call center, make sure your first step is to keep an active and responsive list of contractors that specialize in a variety of tasks so that the landlord can contact the appropriate vendor in a timely manner and without the stress of hoping they actually show up!
Assess your hourly rate as a landlord:
The means taking your monthly profit on rental property, for landlording activities, and dividing this figure by the number of hours you work per month as a landlord.
- Monthly profit as a landlord : $500.00
- Number of hours worked as a landlord (including travel time to rental properties) : 12 hours per month
- $500/12 = $41.67/hour
Let’s say a local, and REPUTABLE, property management company offers a fee of $100/month (as a flat fee) to manage your rental property. Thus, when you look at the cost/benefit analysis :
- The breakeven point is to consider that for every 2.40 hours worked as a landlord is the cost in using this property manager.
- Landlord saves 9.60 hours of time per month – in this example.
- In monetary terms, landlord saves $400.00/month with the 9.60 hours saved at a cost of $41.67/hour.
Hence, at a cost of $100/month as a property management fee, this landlord creates new value of $400.00/month by using the property management service.
What’s Your Highest and Best Use of Your Time?
At the end of the day, what needs to be considered is whether your time spent is the best use of your dollar. While it is not always easy to break your time down into monetary terms, assessing this value is important to make sure your are creating the highest and best use of your time in managing your property.
Should you find that it’s time for you to consider a property manager, as a landlord, feel free to reach out to us :