The scoop on professional property managers
March 31, 2014
We all want to maximize the profits from our investments and a real estate investment or income property is no different. For many investors, the rent just covers mortgage, maintenance, property taxes and insurance on their income property. So why would you want to add an additional expense like property management fees to that list? Well, the simple answer is that the last thing most new landlords want to deal with is emergency phone calls, whether it’s in the middle of the night or when you’re out of town.
So for an approximate cost of less than one month’s rent per year, a property management company can take care of everything from tenant screening and rent collection to repairs and property inspection…. sounds good, right? Sadly though, from my experience, there is one major con to using a property manager… they tend to lease your property out at a below market rent so that it’s easier to find a tenant and by doing that, you’re getting a double hit when it comes to cost of the service.
I’ve sold quite a few suites for investors that have used management companies and it appears to hold true… the monthly rent always seems to be a good chunk below fair market rents. Don’t get me wrong, there is a definite benefit to having the security of a management company negotiate through the Residential Tenancies Act for you and to repair items that may break down but if you live in the city your investment property is located in or you have someone in the city you can rely on to pitch hit for you, then you can probably do it yourself and save a whack of cash.
SO… my advice to you is to do your research, ask the right questions and decide whether it’s really necessary to use a company to manage your property or not.
Click here for a recent column for the Star by Mark Weisleder on the subject.