We currently have 3 rental properties and closing on 2 more in the next month. My spouse and I both work fulltime. At what point do we hire a property manager and what is the going rate for a service?
Lets say we want them to obtain renters, collect rent, take care of simple fixes, and notify us when tennants have major fixes. Thank you
The time to hire a professional property manager is when you no longer want to or have the capability to do the job yourself. There is no magic number of properties, the determining factors are your time, resources, and willingness to do the job yourself.
I have never personally managed my properties. When I first started landlording, I turned my primary residence into a rental when a job transfer took me out of state. I hired a property manager out of necessity. As I acquired more properties, having professional property managers let me geographically diversify my rental portfolio.
I have property managers in several states, and the fees charged are what is the practice for the geographic region. My fees range from 7% to a high of 12%. For the lower fee, I pay more of the leasing costs such as advertising and even a one-time leasing fee. For the higher managment fee, the property manager pays for advertising and does not charge a separate leasing fee.
Survey several professional property managers in your area to get a sense of what is charged and the rates.
Very helpful. Thank you. I am trying to decide whether to take a 10 year fixed loan with higher payments and a fixed 6.25% interest on my homes or go with an ARM for 3 years fixed at 6.25% for 25 years. I would make higher payments on the ARM to pay it off early, but it gives me flexibility if times get tight. I could pay all my loans off in or under 10 years if I make the same payment for a 10 year fix. But do I want to do that? We want to keep buying. We have one completely paid for but we use it as a collateral to purchase the others. No matter if the price is well below market value, should we put 10-20 percent down anyway? I know – a lot of questions.
I’m not the most experienced investor but with the current credit crunch and possible hyper-inflation on the horizon, I’d avoid an ARM like the plague.
JP
I managed my rental properties for a little while, learned what I felt I needed to, and then hired a property management company to take it from there. If you do decide to do the property management yourself, I recommend the property management software below, to help streamline the process for you.
One other point to keep in mind is to establish a relationship with a property management company long before you actually want to hire them. Have them screen your tenants, or whatever, and when you do finally hire them, give them a decent number of properties. That way, they’ll offer you a discount (my property management company charges me 7% instead of 10%).
Good luck,
Thank you all — I like everyone’s advice. I think I will just get help getting the place rented with a couple of services to see how they work and we will continue to handle the rest until we feel we need more. At that point we will have a good idea which one will work best with us. Thank you again.