The pros and cons of using a property management company

This is a collaborative post

Buying a second property and renting it out can be a great idea if you've got spare cash you're looking to invest and want to create a nest egg for the future. Many new landlords though worry about the responsibility that comes with having tenants and choose to use a property management company instead to manage the day-to-day work that comes with being a landlord such as keeping on top of repairs and inspections.

In their article, we'll look at some of the pros and cons of using a property management company versus doing it yourself to help you decide which might be the right option for you.

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The pros of hiring property managers

Time-saving

Let’s face it, managing rental properties is a time-consuming task - it's one of those jobs that ends up taking up way more of your time than you bargained for, especially if you have issues such as unreliable tenants, tenants leaving unexpectedly or emergency maintenance issues. 

Expertise and experience

Property management companies have a wealth of experience and specialised knowledge and if you're a new landlord it might be safest from a legal perspective to hand this over to someone in the know. They'll know the ins and outs of tenant laws, and the rules around selling properties with tenants and will have established relationships with trusted contractors. 

Help to find reliable tenants

Finding reliable tenants is one of the biggest challenges for landlords, so property management companies have robust screening processes to ensure you get quality tenants who pay rent on time and take good care of your property. They also handle tenant relations, so you won’t have to deal with complaints or disputes directly.

The cons of hiring property managers

The cost

A property management company will normally charge you either a fixed fee, a percentage of the rent, or a mix of both, and if you're close to break even as it is then this could be prohibitive. You've still got to factor in tax on your rental income and repair costs, so for some landlords, especially those with a single property, this extra expense might outweigh the benefits.

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Loss of control

When you hire a property management company, you’re entrusting them with the day-to-day operations of your property. This means you’ll have less direct control over decisions and tenant interactions, meaning it's not the ideal choice for people who find it hard to delegate decision-making.

Variable quality

Unfortunately, not all property management companies are created equal and the quality of service can vary hugely between different companies. One of the best ways to choose an agency to work with is via a personal recommendation from someone you trust who has direct experience working with them in a professional capacity. 

Deciding whether or not using a property management company is the right decision for you will depend on lots of factors, including your level of experience, the amount of time you have available and how much you can afford to give away from your monthly rental income. We hope this has given you a starting point though to help you make the right choice for you.