If you’ve been thinking about investing in real estate, you’ve probably heard that you should hire a property manager or a property management company to take care of your investments.
Do you really need a property manager or could you save some money and do it on your own? The answer really depends on a lot of factors. We break it down for you so that you can make a decision that’s right for you.
How Many Properties Do You Own?
This is the deciding factor for a lot of people. If you are new to investing in real estate and only own a single property or two, you may want to learn and establish your process and find that it’s easier to manage things on your own.
Once you have more than five properties, though, things could get a little more complicated. You may find that it may be easier to let someone else take over the management of the properties. Consider this when deciding how many properties you want to own and be responsible for.
How Much Knowledge Do You Have?
Another major factor is how much experience and/or knowledge you have about managing properties. New investors may appreciate the comfort of knowing that the property is being well managed by a company with experience. You don’t have to worry about anything and can rest assured knowing your investments are being well-maintained.
On the other hand, you could be just starting your investing journey after taking a course or reading a book on real estate investing. You may feel like you know enough, and want to learn and get started. Some people are simply more confident when it comes to jumping into new adventures. If that’s you, go ahead and manage the property on your own.
Do You Live in Town?
If you don’t live in Edmonton, it may be best to hire a property manager to take care of your properties for successful long-distance real estate investing. Someone with boots on the ground to let people tour properties, handle any maintenance, and keep an eye on the properties to make sure that the tenants are treating them well.
On the other hand, if you’re a local, you may find that your knowledge of the area gives you an edge in the real estate game. You may be fine handling the property management.
How Much Free Time do You Have?
We’ve found that there’s a lot of variation between investors when it comes to how much time they have to spend actively managing their properties. Some approach their investments in their spare time. They work in a full-time career but have the money to buy investment properties. These people might eventually quit their day jobs to go full time, but right now, they’re comfortable playing an overseeing role. If this is what you think investing will be like for you, it may be smart to hire a property manager. If your tenants have a problem while you’re at work, you need someone else to handle it.
Other people think of investing as a full-time position. They’re more hands-on in the entire process, and they want to do things like meet the prospective tenants and check in on the properties. If that sounds more like your style, you probably don't need a property manager.
Are You Handy?
When a tenant calls with a backed-up sink, who’s going to fix their problem? Even in a new home, you may need to take care of small repairs like this. If you are handy making repairs around your home, or know who to call and have the time to do it, you can probably do this on your own.
If you’re not a handy person or don’t have the time to call someone and make the arrangements with the tenant for access, the property management route could be the better choice. Often, they have these types of experts on staff, which can be more affordable for you in the long run.
Are You a People Person?
At first glance, investing in real estate seems like a hands-off kind of investment. You purchase the property, then forget about it and watch your bank account grow. Right?!
In reality, you spend a lot of time interacting with people. You have to interview prospective tenants and try to decide which one is going to be a good fit. You may have to calm someone down if they’re angry about something that’s gone wrong. You may need to take calls at inconvenient times. These things can wear you down over time. If you’re not a people person, save yourself the headaches and hire a good management company.
There is no doubt that managing your own investment properties can increase your monthly cash flow, but it also creates more work for you. The best thing to do is to look at how much it would cost to hire a property manager, then see if that amount is worth it for your personal situation.
Only you can make that decision.