Should I Manage My Property or Hire a Manager?
Looking after your property when you don’t actually live in the building can be time-consuming and difficult, especially when you don’t live near the home. Whether you have a beachside home in Cornwall or a townhouse in a city centre that is rented out to businessmen visiting for long term leases, you need to set up a way for the home to be managed. Making the choice as to whether you have the time to commit to managing your home or whether you want to hire a company to do it for you usually comes down to money.
This guide will help you decide what is right for you.
Renovations
When you first purchase your property, you will probably have to do some renovations and it is vital that you manage this project. You need to budget for this and prepare for it costing more money than you expect. It is worth having a professional survey the house or having a home inspection so you can estimate accurately. It is always a good idea to have a third extra money wise and plan on it taking more time than you expect.
Once you get closer to renting your property you need to decide between managing the property yourself and hiring a company:
Why manage independently?
Managing your property ultimately means you will have more control of your property. Here are some of the plus points:
- Tenants: You will be able to review, interview and directly control your tenants. You will make decisions on the type of people you have living in your home and be able to keep up a good relationship with them. You will be able to review their requests and deal with any service issues they have.
- Your property: Ultimately you will be able to keep a better eye on your property and if you are unhappy at all with your tenants, you will be able to address the issues.
- Money: You will save between 8 and 10 percent of the rental income and be able to use it towards either the mortgage or other things in your life.
- Rent: Tenants tend to view properties that are independently managed more warmly and you are more than likely to have your home occupied when you manage it yourself. Having a company manage your home is a lot more impersonal and is probably better for a holiday home over a long-term lease. Also, companies have no vested interest in keeping your home rented or to keep your long-term tenants.
Why hire a management company?
Sometimes it is nice just to see the profit from an investment without having to do any of the hard work. Here are the reasons to use a management company:
- Time: Managing your home is hard work and can be very time consuming. If you value your time and don’t want to invest time in managing your property then a management company is ideal for you.
- Renting: When your home is vacant and you are trying to find tenants you will spend a lot of time on your home. You will need to place ads, respond to emails, schedule interviews with tenants and meet potential tenants at the property. You will need to review credit reports, deal with no-shows, get references from previous landlords, draw up the lease, request the deposit and deal with any repairs. This responsibility lies with the management company if you choose to hire.
- Maintenance: If your property is in good shape you shouldn’t have to deal with too many queries once your tenants move in. Expect one major issue a year and expect three to five minor issues. Your management company will deal with all the issues if you decide use them and the only point you will have to be involved is if the tenant stops paying rent or there is a flood/fire.
How to choose a property management company?
You should take the time to interview several property management firms before selecting your favourite. Get references from them and get copies of their insurance to make sure it is adequate.
How to behave towards your management company?
Just because the company is managing your property doesn’t mean they are responsible for the things that happen in your home so always remember this when dealing with them. Stay friendly and professional. You want them to get the best outcome in each situation.
If you have multiple properties and don’t want to spend much time on your property then a management company is a good idea.
If you decide to use a management company make sure you check in every once and a while and inspect the properties, meet the tenants and so on.
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