Beyond Bending Tell You How
When it comes to managing rental properties, there are two options: do it yourself or hire a property manager. On one hand, managing the property yourself can save you money and give you complete control over the process. On the other hand, hiring a property manager can take the burden off your shoulders and free up your time. While there are benefits to hiring a property manager, there are also several disadvantages to consider before making your decision.
In this article, we’ll explore the top disadvantages of hiring a property manager and why you should think twice before handing over the reins.
1. Cost
One of the biggest disadvantages of hiring a property manager is the cost. Property managers typically charge a percentage of the monthly rent, typically between 8-12%. While this may seem like a small price to pay for the convenience of having someone else manage your property, it can add up quickly. For example, if you have a property that rents for $1,500 per month and your property manager charges 10%, you’ll be paying them $150 each month. Over the course of a year, that’s $1,800 in fees.
While some property owners may be willing to pay this fee for the convenience of having someone else handle everything, others may not be able to afford it. If you’re on a tight budget or have a smaller property, managing the property yourself may be the more cost-effective option.
2. Lack of Control
Another disadvantage of hiring a property manager is the lack of control you have over the process. When you manage the property yourself, you’re in charge of everything from screening tenants to collecting rent to handling maintenance requests. This level of control can be important to some property owners who want to ensure everything is done exactly the way they want it.
When you hire a property manager, you’re essentially entrusting them with your property and giving up some of that control. While most property managers are highly qualified and experienced, there’s always a chance that they may not handle things the way you would if you were managing the property yourself.
3. Communication Issues
Communication is key when it comes to managing rental properties. As the property owner, you need to be kept in the loop about everything that’s happening with your property. Unfortunately, communication issues are a common problem when working with property managers.
Some property managers may not be as responsive as you’d like when it comes to answering emails or returning phone calls. Others may not communicate important information to you in a timely manner, such as maintenance issues or tenant complaints. These communication issues can cause frustration and make it difficult for you to stay on top of everything that’s happening with your property.
4. Limited Flexibility
When you manage your own property, you have complete flexibility to make changes or adjustments as needed. For example, if you decide you want to allow pets in your rental unit, you can make that decision and update your lease agreements accordingly.
When you hire a property manager, you may not have as much flexibility. Some property managers have strict policies in place that they follow for all of the properties they manage. This can limit your ability to make changes or adjustments to your property as you see fit.
5. Potential for Mismanagement
While most property managers are highly qualified and experienced, there’s always a chance that they may mismanage your property. This can be due to a variety of factors, such as negligence, lack of experience, or even fraud.
If your property manager mismanages your property, it can lead to costly repairs, lawsuits, and other legal issues. While there are ways to protect yourself from these risks, such as conducting thorough background checks on potential property managers, there’s always a chance that something could go wrong.
6. Limited Personal Touch
When you hire a property manager, you’re essentially handing over the keys to your property and entrusting them with everything from tenant screening to rent collection. While this can be convenient, it can also be impersonal.
When you manage the property yourself, you have the opportunity to establish personal relationships with your tenants and handle everything on a more personal level. This can make it easier to address any issues or concerns that may arise and ensure that your tenants are happy and satisfied with their living arrangements.
7. Potential for Conflicts of Interest
When you hire a property manager, there’s always the potential for conflicts of interest to arise. For example, your property manager may have their own maintenance company and may be more likely to recommend their services to you, even if they’re not the best option for your property.
Additionally, your property manager may have personal relationships with tenants that could cloud their judgment when it comes to managing your property. While most property managers are ethical and professional, there’s always a chance that conflicts of interest could arise.
8. Difficulty Finding a Good Property Manager
Not all property managers are created equal. While there are many highly qualified and experienced property managers out there, there are also many who are unprofessional, inexperienced, or simply not a good fit for your property.
Finding a good property manager can be a difficult and time-consuming process. You’ll need to conduct thorough research, read reviews, and interview potential candidates to ensure that they’re a good fit for your property.
9. Limited Transparency
When you hire a property manager, you’re essentially entrusting them with your property and giving them access to sensitive information, such as rent collection, tenant information, and financial records. Unfortunately, not all property managers are transparent about how they’re managing your property or how they’re using this information.
Some property managers may not provide you with regular updates or may be vague about how they’re managing your property. Others may be less than forthcoming when it comes to providing financial reports or other important information. This lack of transparency can make it difficult for you to stay on top of what’s happening with your property and ensure that everything is being managed properly.
10. Potential for Legal Issues
Finally, hiring a property manager can increase your risk of legal issues. While property managers are typically well-versed in local laws and regulations, there’s always a chance that they may make a mistake or overlook an important detail.
If your property manager does make a mistake or overlook an important detail, it can lead to costly legal issues, such as lawsuits or fines. While there are ways to protect yourself from these risks, such as conducting thorough background checks on potential property managers and ensuring that they have the proper licenses and certifications, there’s always a chance that something could go wrong.
Conclusion
While hiring a property manager can be a convenient way to manage your rental property, it’s important to consider the potential disadvantages before making your decision. From cost to communication issues to limited flexibility, there are several factors to consider before handing over the reins to someone else.
If you do decide to hire a property manager, be sure to conduct thorough research and choose someone who is highly qualified, experienced, and trustworthy. By doing so, you can minimize the risks and ensure that your property is well-managed.
People Also Ask
What are the advantages of hiring a property manager?
Hiring a property manager can save you time and reduce the stress of managing your rental property. Property managers can handle everything from tenant screening to rent collection to maintenance requests, freeing up your time and allowing you to focus on other things. Additionally, property managers are often well-versed in local laws and regulations, which can help you avoid legal issues.
How much does it cost to hire a property manager?
Property managers typically charge a percentage of the monthly rent, typically between 8-12%. This fee covers everything from tenant screening to rent collection to maintenance requests. While this may seem like a small price to pay for the convenience of having someone else manage your property, it can add up quickly.
What should I look for in a property manager?
When choosing a property manager, it’s important to look for someone who is highly qualified, experienced, and trustworthy. Be sure to conduct thorough research, read reviews, and interview potential candidates to ensure that they’re a good fit for your property. Additionally, look for property managers who are well-versed in local laws and regulations and who have a proven track record of success.
