Property management can be a good choice, but it brings with it some significant costs and there are some drawbacks. Evaluate the following factors to determine if hiring a property management company would be a good move for your business:
You should consider hiring a property management company if:
- If you have lots of rental properties or units, you are likely to benefit the most from hiring a management company.
- If the house or apartment you are renting is located so far that traveling to it every time something needs fixing and managing the property will be hard, hiring a property management company can be worth it. They have people who can deal with daily logistics that arise in places far from where you live.
- You might not want to be too hands on with the management of your property. Many landlords care about finding good tenants and maintaining a safe and attractive property themselves. However, if your ultimate goal is to simply make money off renting property, you might want to hire a property management company to take over dealing with the day-to-day aspects of your rental
- As much as we enjoy hands-on management, sometimes it is difficult to find enough time to dedicate to the business. For example, some of us may not work in the property industry and are still finding their footing with regard to how best to make these decisions. You also don’t want to spend your valuable time managing the business. If you want to focus on growing your business or looking for new properties, arranging financing for renovations and changing your business structure, than a management company might be the best investment for you.
- You can afford the cost. Hiring a property management company is an attractive option if you can afford the fees. Different companies have different costs, so it’s important to find out before signing a contract. You might expect, for example, quotes of 5% or 10% of what you collect in rent. If your business is generally strong, then you may not need a commercial property manager. However, if your business is in a down market or you find that it’s too much to handle on your own, then managing it with the help of a commercial property manager may be the best decision for your company.
- In the event of rapid business growth, you may be able to use an experienced management company like ours to help your business run smoothly.
- You should avoid becoming an employer if you expect to hire a resident manager or other employees. This will put you in the position of having to handle payroll and deal with myriad legal obligations and considerations. But, because property management companies aren’t your employees (they’re contractors), and neither are the people who work for them, by using one you avoid all of the hassles of being an employer.
- Your property is a part of affordable housing. If you participate in my affordable housing program, things can get complicated. This grant-based program is an incentive to landlords within a designated area, who typically receive financial assistance in form of a grant or loan, in return for renting out a section of their property to lower income tenants.Landlords should be careful to comply with complicated regulations, or risk losing their assistance. Hiring a property management company will save them the hassle and allow them to focus on other important aspects of their business.