I need to rent my house out for 1 to 2 years. Should I hire a property manager?

Question

What are the pros and cons?

Answer 1

Yes!!

Unless you have experience in real estate or property management, you want a property manager on your side.

First, they can help you select the proper tenant by doing the approriate background checks, and making sure the lease is a comprehensive lease that addresses most of the issues that can arise, it is based on their experience that their leases get better and better each time they are written.

Secondly, they are experienced and skilled in managing the maintenance of the property to ensure that repairs are done in a timely fashion, and they may have staff on site to do repairs which in the long run will probably save you money.

Additionally if tenant disputes do arise, they are going to be able to act more quickly then you, if you have to search for the correct way to handle it.

While it may cost you for their service, it is well worth it. There are so many horror stories of terrible tenants, and much of it could have been avoided with the proper background checks, tighter lease, and knowledgable management to stop the situation before it escalated.

Good Luck!

Answer 2

Are you going to be in the same town where the property is?
Do you have the time to be involved with advertising/showing the property to prospective renters, and then keeping up with maintenance issues as well as enforcement of the lease agreement (collecting rent & making sure they are not trashing the place, etc.)
Are you fairly handy with DIY things, and/or do you have the resources and contacts to be able to hire those things done?

If the answer to all those questions is yes, you may be ok with foregoing a property manager. Make sure you do your homework with all the liability issues and use a good lease contract, and hopefully the market will bear a large enough monthly payment and deposit for you to keep some funds set aside for upkeep.

Do you have enough equity in the home to be able to rent it out at a competitive rate and keep funds set aside for taxes, insurance, upkeep, + the % for the property manager? If the answer to this question is no, you should probably try to cut out the middleman so you can at least break even.

Bottom line, do you want to be more hands-on, or can you afford to be more hands-off? We are handling our own right now, but it is with a family member so it is a little different than a straight lease arrangement. I have also been involved before with a property manager for a condo that ended up being a slum--we couldn't even find people with housing assistance to look at it (horrible experience). There is no way I would have tried to tackle renting that place out directly--we definitely needed the property manager and even then we lost our shirt.

You said this is temporary--does that mean you will live in it again after the couple of years, or sell it at that point? You may want to hire a property manager that also deals in real estate to help you watch the market and determine when would be a good time to list it in that neighborhood. (Just a thought.)

Good luck whatever you decide!

Answer 3

I am assuming that you will still make a profit if you hire the PM and rent the place out.

I would suggest hiring a property manager if: 1/you simply do not have time to manage the property.

I moved several hundred miles away and rented my house out to the brother of a neighbor, without doing a credit or background check. MISTAKE! I had two mortgages. Within 4 months, the renter had vacated the house with no notice, owing me rent for 2 months + attorney's fees, and damaged the property. I was never able to locate him (it has been 10 years). I swore I'd never rent property again. However, if you find a good PM to manage your asset, you should be in good shape. I should have done this myself.

Answer 4

Pro's Less hassle for you no finding or screening tenants
No unexpected maintenance calls in the middle of your working day or social life.
Not having to collect rent personally, not having to listen to "I promise I will pay double next week"
Less contact with tenant lets both of you get on with your own lives
Property managers usually have cheaper rates and shorter waiting times for tradesman and handymen

Con's Property managers cost you money
If you get a good tenant (and the majority are) the property manager gets his or her money for very little effort
Just like some tenants some property managers can miss manage your property
You may find it harder to stay on top of minor maintenance tasks, this could cost you big dollars at a later date

Answer 5

NO !

Not for one house.... that's rediculouse...

You will need
1. a die hard renters contract ( real estate lawyer )
2. renters insurance
3.back ground check renters
3.procure a hefty deposit
4.an on-call handy man, someone you know that knows what he is doing but will work for peanuts...
5.buy clearance carpet and paint at Lowes or Home depo during the year, you'll need it.
6.reward them for on-time payments ( by jacking up the price to begin with, if they are late you make out but don't loose if they're on time )

It's better to lease with the option to buy ! They take care of the place because they feal they own it ! They fix it up and never are to call you for anything ! And when they can't afford the down payment in a year you take it back or extend the plan. And if they defalt you have the house still, plus you get larger monthly payments because they are leasing not renting.

Good luck, oh... and brouse the landlord books in the real estate section of the bok store, read up on this before you get involved in it !

Answer 6

the pro's are that a Property manager has the resources to do a credit check and a minor background check. They have to handle the questions and demands of the renters, They handle the collection of rent, they handle a final inspection etc. They know all the legal aspects of renting a property.

The con, you have to pay them about 10% of the amount of the rent to do all this. They may not be as strict as you would.

Answer 7

Perhaps the biggest argument for the property manager is that should it me necessary to evict someone they may be able to do that easier and they may have a better way of checking on a possible tenant more than you would. If you are going to be in the same town and are able to get a good tenant, there may not be any advantage and you can do that yourself.

Answer 8

If you are NEW to that locality or NEW to the town or city, it is better to approach to some real estate company for their prompt action. It is time saving too. But, you have to pay brokerage fee.

If you are a familiar face in the locality and have been in that town or city, apply to use the network of your known persons, to get the job done, mostly without paying the hefty brokerage fee.

Good Luck!!

Answer 9

Usually best to do that unless you plan to have a "second job" being a property manager..collecting rent, doing repairs, finding tenants, etc..

Answer 10

The greatest mistake you could make is in the selection of a tennant.

Thats where you could get in trouble if you do it yourself.