Whether you are new to considering income properties for sale or you are a more seasoned real estate investor, the question remains: can you manage your property or properties by yourself, or should you bring in a professional property management company? There are many different factors to consider when you are figuring out whether to DIY property management for your cash flow real estate or whether to call in the pros. Here are some questions to get you started:
1. Do you live nearby?
This is a no-brainer. If you live out of town, or if you live far enough away from your rental property that it would be a pain to get there in an emergency, then you are probably best off letting a property management company take care of your cash flow real estate. If you live close by and are happy to run over in the middle of the night to troubleshoot the broken toilet water supply that is spraying all over the bathroom, then a DIY approach might be more your speed.
2. Do you have spare time?
It can be time-consuming to find a tenant. Real estate website zillow.com estimates that you will need to have several showings of a property to get it rented, in addition to reading rental applications, checking credit reports, and calling references. On the other hand, the same site estimates that as a landlord of a property that is in good condition, you are likely to have only three to five minor issues and one major issue with the house each year. It is up to you whether you have the time to take on these concerns. Generally, a rental management company will charge anywhere between a half month's rent and a full month's rent to place a tenant, and they will charge 8 to 10 percent of the monthly rent to provide ongoing property management after the tenant is placed, according to Zillow. As you are considering income properties for sale, be certain to factor in the time or money needed to manage the property well.
3. Do you have good people skills?
To be a good property manager, you need to treat your tenants with respect and respond to their needs in a timely manner. You need to be willing to compromise and work together on issues if you hope to keep the same tenants in the property in the long term. If you're unable to negotiate the landlord-tenant relationship in a mature, responsible way, or if you just don't like the idea of needing to interact with your tenants on a regular basis, then you may like the idea of taking something off your list of responsibilities and entrusting a property management company with your cash flow real estate.