Pros and cons of hiring a property manager vs self managing.  

TL:DR

You have a spicy decision to make: should you hire a property manager (PM) to manage your portfolio of homes or self manage?

It really comes down to two end results:

It costs less money and more time to manage by yourself.

It costs more money and less time to hire a property manager.

Essentially, do you want to have more money in your pocket or time in your day?

Now, let’s bust out the spicy pros and cons list for hiring a property manager:

PROS of hiring a property manager (PM):

PMs save you HEAPS of time.

Like, an ungodly amount of time.  They’ll handle everything from marketing to move out.  All the paperwork, organization, coordinating vendors for maintenance, collecting rent, and all that shiz you may or may not want to handle.  The list is way more than I can mention here for the sake of brevity.

PMs are exceptionally organized and track everything on your behalf.

PMs will maintain all your records in one place.  Anything regarding the renter, your financials, lease agreements, maintenance records, you name it.  They have it all and use fancy software to keep it easily accessible and organized.  

They have a set of trusted contractors on deck ready for maintenance.

You won’t have to worry about finding a contractor, calling them, scheduling the repair, and then paying the invoice after the work is complete.  The PM will handle all of this for you!  These contractors are well versed in how to work with PMs and have streamlined the process for both renters and the PM.  In some instances, certain vendors do not offer their services to private or individual landlords.

PMs handle all financial aspects.

This can include collecting rent, paying vendors, paying utilities, and even paying the mortgage on your behalf.  You won’t have to worry about juggling all the bills, payments, records, blah blah accounting blah.  Again, major time saver!  To top it off, the PM will send you a statement on a specific cadence (usually monthly) that itemizes all transactions for your records.

PMs communicate with tenants on your behalf.

They act as the go-between for you and the renter.  This is not only a time saver but also can be a conflict saver.  In my time as a PM, a majority of owners decided to be hands off with communication and let us do it all which benefited everyone.  It becomes messy when the boundaries between all 3 parties are crossed and communication breaks down, expectations are skewed, and it can do more harm than good.  If you’re going to hire a PM, get your money’s worth by letting them do the talking.  

PMs allow flexibility to be hands on or off.

Some PMs will allow you flexibility in how much or little you want to be involved with the management process.  Ultimately, it’s your property so you should have a say in how you want things done.  This is a nice way to be involved in tasks you deem important and leaving the undesirable chores to the PM.  A great PM will allow you to be as hands on or off as you like (to a certain degree).  This could include approving applicants, writing the marketing copy, or accompanying the PM when they conduct routine property inspections.  

However, be advised that not all PMs offer flexibility like this and prefer to do everything their way.  If this is mutually agreed upon, that’s great! Just make sure it’s what both parties agree on before they start managing the property.  

PMs are fiercely knowledgable about housing laws and practices.

PMs are the professionals and know the ins and outs of things like fair housing and renter laws.  This is extremely important because failure to abide by laws and regulations can yeet you right into a lawsuit. 

CONS of hiring a property manager:

Management fees can be expensive and lower your ROI.

PMs require either a percentage or flat fee management fee for them to manage your property.  This can be expensive!  But typically you get what you pay for with all the work they are doing on your behalf.  Just be prepared for a lower income than you would receive if you self managed.

A slumlord PM will cost you more than money.

Unfortunately, there are bad PMs out there that won’t handle your investment with intelligence and care.  This negligence can flesh out in many forms: putting a shoddy tenant in the home who damages the house, not adhering to housing laws resulting in legal troubles, and not correctly handling your finances (tax time about to be BRUTAL).  The horror stories are out there so make sure and do your research before signing with a PM.  

A PM limits your personal control/flexibility in managing your portfolio.

If you and the PM have differences in management decisions it can feel like a battle to work with them and get things done.  If you’re someone who craves control and oversight of everything, having a PM might not be a good fit for you.

Overall, you’ll want to consider all of these factors before deciding if hiring a property management company is the best fit for you.  Your ROI expectations, personality, and skills should be considered when making this decision.

If after reading this you’re thinking it sounds like you’ll be forfeiting too much control or money, hop on over to this post: Pros and cons of self managing vs hiring a property manager.

Best of luck to you and your property management decision journey!