If you are new to real estate investing, you are likely weighing the pros and cons of hiring a professional management company to manage your property portfolio. As you consider your options, review the job duties of owning real estate investment properties, your time and the financial investment involved before making a hiring decision.
Some of the duties involved in owning a real estate investment property include:
- Arranging for and managing any property repairs
- Addressing any property maintenance issues
- Scheduling any required inspections
- Managing tax paperwork and filings
- Collecting rent or lease payments from tenants
While individual investors can often manage these tasks on their own initially, the scope of the responsibilities increase exponentially as the property portfolio begins to build. Some property experts recommend that beginning investors manage their first properties on their own before turning to a professional. This hands-on experience will increase the investor’s general level of property management knowledge. And, this knowledge becomes valuable over time, including when the investor decides to turn over duties to a professional management company.
When a property management company comes on board, they can handle any number of responsibilities, including working with repair professionals, gathering repair quotes, collecting tenant rent, addressing tenant issues, ensuring that properties are in compliance with any applicable state laws and general business management. Property management companies charge fees as a percentage of the total rent, while others charge a flat fee per month. If you choose to leverage the services of a professional, be sure to negotiate your fees and to execute a contract outlining expectations for accountability.