WHEN DOES PROPERTY MANAGEMENT MAKE SENSE?
Brought to you by Advantage Asset Management – A Houston Property Management Company
This is a common question that almost all real estate investors ask themselves. Should I outsource to a property management company, or should I manage myself? We will review this question in more detail below.
1). You have little knowledge about real estate and need a partner.
This is a good way to learn and get some experience. Property managers can give you advice and show you how they manage properties. On the surface, it sounds relatively simple. You just collect rent and make sure you fix anything that breaks down; however, when you see how things actually can pan out, it can be a little overwhelming.
3.) You just want peace of mind.
This is something you can’t really put a price on. If you have a good partner managing your property, you can rest easy knowing you don’t have to drop everything to solve every problem that may arise. In the case of extreme circumstances (evictions, floods, major property damage), it really does help having a company who can deal with those situations effectively.
4). You don’t live close to your rental property.
While technology has made many factors “spaceless” (such as collecting rent or entering in work orders with local vendors, managing a property from afar is still a difficult task. If you are not able to visit the property occasionally on a proactive basis or urgently if an issue arises, you will be reliant on the tenants and maintenance people to tell you if something is needed.
5.) The Numbers Work Out.
If you’re cash flow positive with property management fees, it will make the decision much easier. Make sure you have run the numbers to see if it all makes sense or ask the property management company to do it. Keep in mind that property management is tax deductible.
6.) You want to grow your real estate portfolio.
In this scenario, you want to focus your time on growing, and you don’t want to spend your time managing a property. Partner with a property management company and let them know your goals and intentions.
See some of our other articles where we go into deeper discussions on specific scenarios regarding investment properties. We look forward to answering any questions or clarifying anything else that can you help you make an informed decision!
*This contains excerpts from our full article. To continue reading, CLICK below to read in full.