Plenty of investors have come to realize that managing property management responsibilities is not for them. Being a real estate investor and being a property manager are two entirely different jobs. Not everyone is cut out to deal with day-to-day tenant issues. Many investors are looking for a means of passive income and know that they don’t want to add to their workload.
There are real estate investors, however, who’ve convinced themselves that they have to do it all. They have to be the owner and the manager simultaneously. There are reasons behind this line of thinking, and we can understand where some investors are coming from.
Why Investors Take On Management Responsibilities
I’ll save money if I just manage it myself.
On the surface, this is true. Having a property manager to take care of your investment property means having an employee. Obviously, hiring a property manager means her or she will be taking a cut of your income as an investor. Usually, that cut is a 10% property management fee — not a lot, at the end of day.
Ask yourself: what’s my time worth?
Only a perfect tenant and a perfect property take little time and effort to manage. Most investors aren’t lucky enough to have perfect tenants or perfect properties all the time. Though you’ll be paying a property manager, you’ll save time and stress by not dealing with troublesome tenants and maintenance requests yourself.
You may be saving money on the surface, but in the grand scheme of things, you’re taking on a lot of stress and expending a lot of energy that could be directed into advancing your investments. Spreading yourself too thin as an investor when trying to manage a property can result in inefficiency and burn outs.
Is saving a little bit of money every month worth that hassle?
I know how I want my property taken care of.
Investors usually do know their standards for their investment properties. The problem is, their standards are can be too high. There’s nothing wrong with having high standards for your properties, but perfection is not possible. If you’re bothered when a property gets damaged in the smallest ways, taking on property management responsibilities is probably not for you.
Your tenants aren’t expecting perfection, and the condition of a property may be different than the vision you have for your own home. If you tried to hold it to the same standards, you’d find yourself wasting time and money on unnecessary improvements and repairs.
Hiring a property manager means someone else worry about all of those little things, keeping the property at acceptable levels without trying to achieve perfection.
I don’t trust someone else to do the job.
There are some perils to hiring someone else to take care of your investments. Some fear that property managers will make up maintenance issues to squeeze more money out of your pocket. Others don’t like the notion that they don’t know whether or not the manager taking care of the property properly.
Well, you can know. If you’re receiving rent on time along with detailed reports every month, you've probably found yourself a good property manager. If you suspect something is wrong, investigate. It’s easy enough to verify how things are going and whether or not your employee is reliable.
It's OK to let go a little. You can trust most property managers to do their job and to do it well. As long as you hire someone energized and responsible, there really shouldn’t be any issues in letting a manager take the reins.
While some real estate investors juggle property management responsibilities just fine, it isn’t the path for everyone. Carefully examine your own situation, goals and needs to weigh whether or not you want to take the leap and hire a property manager. Just don’t make excuses as to why you won’t when you’re losing precious time and money trying to handle it yourself.
What are your favorite things about having a property manager for your properties? Tell us in the comments.
Grab a Complimentary Copy of our Hit E-Book on Buying Passive Real Estate in Other States!