So, you’ve bought a wonderful house in a great neighborhood with perfect light, ample square footage, and maybe an extra room for an awesome home gym, art studio or entertainment suite. But, for one reason or another, it’s time to move. Maybe you’re PCS-ing. Maybe you need a bigger house. Or maybe you and your family just want a change of scenery. But that’s not necessarily a reason to sell the fantastic place you’ve been living in. With a little work and some decent planning, you can turn your former home into an investment. We’ve dished out some previous pointers on becoming a landlord, but in this piece we’ll take a deeper look into one aspect of renting out a house: property managers.
What is a Property Manager
In brief, a property manager is exactly what it sounds like: an individual or company that tends to the property you own and the needs of any tenants living there. They deal with move-ins/out, maintenance, repairs, monetary disputes, etc on your behalf. They’ll even handle advertising and listings for your property when it’s time to bring in some new renters.
The Costs
Obviously the services of property managers aren’t free. After all, what is? Typically you’ll pay one a monthly rate based on the property’s rental value, most likely around 8-12% of it. Other places may charge a flat rate, but the percentage pricing is much more common. Additionally, you may have to pay extra fees covering some specific services. Things like evictions, labor charges for maintenance personnel, and bonuses for bringing in new tenants may be grounds for additional charges. All of this should, of course, be discussed and agreed to between you and the manager before you hire them.
The Benefits
Some people may wonder why you’d shell out money to a property manager instead of tending to the rented property on your own and pocketing all the incoming rent. Particularly if you’re the handy, do-it-yourself type. But that may not be possible, particularly if you work full time or won’t be living near the rental property. A property manager keeps an eye on and tends the place on your behalf, saving you time and hassle. And, if you live far away, it may be your only option to ensure the rental process goes smoothly.
No two property managers or management companies will have the same arrangement for the same property, and every manager/company is likely to handle every individual property differently. But the basics covered here apply to pretty much any property manager you might employ to keep your rentals cared for and profitable.