All multifamily apartment investors have to a make a decision of hiring a property management company or managing the propery themselves. Many investors manage properties on their own or with the help of an employee, such as a resident manager. But sometimes investors need more help, and that's when a property management company might make sense.
Why do people invest in apartments?
Multifamily Apartment investing creates stability, diversity, cash flow, and long-term appreciation for your investment portfolio. But with this comes onsite management, collecting rent, maintenance, residents, leases, etc. If you prefer managing your properties yourself but are looking to improve your return, check out Property Management Tools.
What Does a Property Management Company Do?
Management companies deal directly with prospects and residents, saving time and worry over marketing rentals, collecting rent, handling maintenance and repair issues, responding to complaints, and pursuing evictions.
When Should You Hire a Property Management Company?
Hiring a property management company can be expensive. And, even apart from the cost, relying on a property management company is not for everyone. However, here are some examples of when a management company would help tremdously.
Lots of properties or rental units. The more rental properties you own and the more units they contain, the more you're likely to benefit from a management company.
You don't live near your rental property. If your rental property is located far from where you live, hiring a property management company can be invaluable in dealing with the many issues that you will not be able to handle from afar.
You're not interested in hands-on management. Many investors look forward to the challenge of finding good tenants and the rewards of maintaining a safe and attractive property on their own. But if you view rental property ownership strictly as an investment and want little or nothing to do with the day-to-day management of your properties, consider hiring help to manage your property.
You can afford the cost. Hiring a property management company is an attractive option if you can afford the fees. When interviewing companies, expect to hear quotes ranging between 5% and 10% of what you collect in rent revenue.
You're suddenly inundated with management tasks. If your portfolio is growing, at some point you may find that you need a substrantial amount of help to manage everything properly. At that point, it might make sense to hire a management company.
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