How to Hire a Property Management Company (The Right Way)

Want to be a real estate investor but not a landlord? A property manager can oversee your rentals, lighten your workload, and help you scale your portfolio faster. In this article, we’ll show you how to hire a property manager, the pros and cons of having one, and one way to get built-in property management for your next rental property!

Summary: 

• A property manager is a person or company that handles most of your rental property’s day-to-day activities for you.

• Typical property manager responsibilities include screening tenants, communicating with residents, maintaining the property, and collecting rent.

• Turnkey rentals are some of the best real estate investments, as they often come with property management and tenants already in place.

 Browse cash-flowing turnkey rental properties with property management in place!

What is a Property Manager? (Responsibilities)

A property manager is someone who handles much of the day-to-day operations of running a rental property. Landlords will often hire property managers to save time, but great property managers run the rentals even better than the average landlord due to better tenant screening, optimized rent increases, and expedited maintenance. As a landlord, you should expect to pay a property manager roughly 8% - 10% of the monthly rent.

Property Manager Responsibilities

A great property manager will make your life easier while also taking better care of your property. Some of their responsibilities include the following:

• Finds and Screens Tenants: Property managers will advertise vacant (or soon-to-be-vacant) units, screen tenants, and approve the best candidates for your property.
• Maximizes Rents: Leveraging their own marketing expertise and resources, the property manager gets your units occupied and strategically raises rent prices.
• Collects Rents: Collecting rent checks and chasing down payments can be a headache, but the property manager handles all of this for you and ensures you’re paid on time.
• Schedules and Oversees Repairs: When maintenance or repairs are needed, property managers schedule quality contractors and handymen to complete the work quickly and properly.
• Facilitates Turnovers (Move Ins/Outs): Property managers minimize vacancy by moving out tenants and placing new tenants quickly.

When to Hire a Property Manager 

Not every landlord needs a property manager, but hiring one is often the right move in any of these circumstances:

You Have No Time to Manage Your Rentals

Property management involves everything from communicating with tenants to collecting rent. If you work a busy W-2 job (or multiple jobs), you might not have the time to keep up with your property’s day-to-day tasks.

You’re Scaling Fast 

The more properties you add to your portfolio, the more difficult it becomes to tend to all of them. This is especially true if you’re investing remotely or have properties spread out across different markets.

You’re Ready to Retire

If you’re approaching retirement age (or early retirement), the last thing you want is another job. With a property manager overseeing your rentals, you’ll have much less stress and more passive income in retirement!

You’ve Had Enough!

Most investors don’t want to screen tenants, chase down rent payments, or take calls at 2 AM. If you don’t have the bandwidth, skills, or desire to manage rental properties, outsource it to someone who does.

Some Rentals Include Property Management!

Finding the right property manager can be a challenge, but if you buy a newly built or renovated turnkey rental, this is a non-issue. Rent to Retirement has turnkey properties for sale that come with trusted property managers (and often tenants) in place. This means that when you close, someone is already handling all of your property’s activities for you—communicating with tenants, collecting rent, and more!

How to Hire a Property Manager (8 Tips)

Want to make sure you hire the best possible property manager for your rentals? Here are eight tips to help you make the best choice:

1. Ask Other Investors for Referrals

One of the best ways to find property managers is to ask other investors for recommendations. Check the BiggerPockets forums, Reddit, and Facebook groups, or talk to other investors at local meetups and other networking events.

2. Call Title Companies/Local Vendors

Title companies, contractors, and local vendors work with many investors, which means they often have rolodexes full of great agents, lenders, and property managers. Call around and ask for their best recommendations!

3. Look Up Online Reviews

You can learn a ton about a property manager from their online reviews. Start with Google, Yelp, and other popular review sites, but also scour Reddit and other forums to ensure they’re legitimate!

4. “Secret Shop” as a Tenant 

Call the property manager’s leasing line as a tenant to schedule an appointment or showing. This will give you a better idea of whether they’re professional, communicative, and responsive.

5. Interview Managers (And Ask THIS)

Never hire a property manager without an interview! Confirm that they manage your type of property, and ask other questions like:

• How many clients do you currently have?
• What’s your recurring client percentage?
• How many properties do you manage?
• What’s your average turnover?
• How often do you send financial reports?
• How do you know market rent is up to standard?
• How do you ensure the property is in good condition?
• What’s your tenant screening process?
• How many evictions have you had this year?
• Do you invest in real estate as well?
• …and others!

Don’t rush your interviews! Some take 30 minutes to an hour to go in-depth and gather the information you need to make the right decision.

 Skip the hassle of finding a property manager! Many turnkey rentals come with property management in place!

6. Request Their Monthly Reporting Template 

This essential document provides the landlord with information about their property’s monthly financial and operational performance. If the property manager doesn’t have one, or if it’s sloppy, run!

7. Weed Out Those with Junk Fees

Property managers should be incentivized to retain tenants, not get them out so they can charge a turnaround or marketing fee. Comb through their fee schedule to ensure they aren’t nickel-and-diming you for every process.

8. Test with One Property to Start

Regardless of who you hire, it’s wise to start with one property. As the property manager proves they’re the right fit, you can add more properties to their plate.

Pros and Cons of Hiring a Good Property Manager 

Thinking about hiring a property manager? Carefully weigh the pros and cons beforehand.

Property Management Pros

Many investors prefer to have a property manager oversee their rentals for these reasons:

• More free time to enjoy or focus on scaling 
• Higher rents and less turnover/non-payment 
• Better preventative maintenance and faster repairs 
• Quicker tenant communication
• Deeper vendor networks for better pricing/service
• Fewer headaches and less stress
• Better understanding of the market and local housing laws

Property Management Cons

Hiring a property manager isn’t always the right move. Consider the following drawbacks:

• Potentially reduced cash flow (monthly property management fee and other fees like turnover/marketing fees)
• Less direct control over who lives in your property 
• Tenants may receive a less personalized experience
• More potential for communication breakdowns

Get Managed Rentals from Day One!

Don’t want to go through the trouble of finding, vetting, and hiring a property manager yourself? Rent to Retirement has turnkey rentals for sale, with fully vetted property managers already in place. This means that you’re not only getting a newly built or renovated rental property but also a professional to oversee it for you.

How to Hire a Property Manager FAQs

How Do You Hire Someone to Manage Your Property?

To hire a property manager, you’ll want to search for the top options in your market and ask other investors for recommendations. Once you have a few options, conduct in-depth interviews with questions that will help you determine whether they’re the right fit.

How Much Does It Cost to Hire a Property Manager?

Investors should expect to pay their property manager roughly 8%-10% of the monthly rent. However, fee structures vary from one property manager to the next, so make sure you’re comfortable with the entire fee schedule before committing to one.

Is It Worth Getting a Property Manager for One Property?

Hiring a property manager is often worth it, especially if you have little desire or capacity to manage the property yourself. If you’re investing out of state, a property manager is often a necessity!