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The Case for Hiring a Professional Property Manager

By Gordon Reeder © 2001

In the Article Why buy a Duplex I mentioned the downside of owning a duplex. I don't want to scare you away from making a good investment. After all I owned and managed duplexes for many years without incident. But it required constant attention. If you have the time and possess the necessary skills, you can successfully self manage your properties. On the other hand many investors prefer to hire a property manager.

Here is what owning a duplex is like.

1. A tenant has vacated one of your units.
   1. You need to hire a cleaning service to steam clean the carpets.
   2. The unit needs to be painted.
   3. All the bathrooms and the kitchen needs to be scrubbed. Even if the tenant cleaned, it won't be clean enough.
   4. The yard will need to be cleaned (they always leave something behind).
   5. You will need to make a bunch of minor repairs.
2. Now you need to find a new tenant.
   1. You need to advertise your unit is available for rent.
   2. You need to be available to take phone calls from prospective tenants.
   3. You need to take the time to walk prospective tenants through the property.
   4. You have to screen your prospective tenants.
   5. You need to execute a proper rental agreement and move-in report.
3. Once you have a tenant in the property you still have to:
   1. Collect rent.
   2. Keep proper records of rent received and security deposits.
   3. Send out late notices when rent is late.
   4. Deal with repairs.
   5. Deal with tenants calling at all hours of the day and night.
4. You may have to be the bad guy and confront the tenant because:
   1. They are late paying rent.
   2. They are not taking care of the property.
   3. Their rent check bounced.
5. Then the tenant eventual moves out and you have to:
   1. Schedule a move out inspection and fill out a move-out report.
   2. Prepare a tenant's accounting report and refund check.
6. Now do it all over again.

If you have only one property, the task of managing it can be quite easy. Especially if tenants decide to stay for several years. But once you have acquired a few properties, the management task can begin to take a significant portion of your time. Imagine the above list of tasks times 6. If you own several properties you should definitely consider professional management.

A professional manager...

• Will be familiar with all the federal, state and local landlord/tenant laws for your area.
• Will know how much rent you can charge for your property.
• Will have access to advertising channels not available to you (IE, the RLMS).
• Will have rental applications and consistent screening policies that meet all of your legal obligations.
• Will have a proper and legally binding rental application.
• Will perform thorough move in and move out written inspections.
• Will have established relationships with painters, electricians, roofers, carpenters, cleaners, etc.
• Will be able to effectively confront and negotiate with tenants and enforce the terms of the rental agreement, recover NSF checks, evict tenants.

In return for all this a property manager will take a 5% to 10% cut of the collected rents. This is a reasonable amount when you consider that most owner/managers will charge rents 10% to 15% below market then fail to properly raise them over time. You are also getting peace of mind.

The National Association of Residential Property Managers provided information for this article.