Owning an investment property can be a great way to build wealth over time. However, being a landlord requires a significant amount of work, even if you just own a single rental unit. Dealing with tenant screening and selection, rent collection, maintenance requests, repairs, accounting, legal compliance and more can quickly become a part-time job. At some point, you may decide hiring a property management company is worthwhile so you can focus on other priorities. But how do you know when it makes sense? Here are some signs it may be time to hand off landlord duties. If you want to hire a reliable property management company in Atlanta to effectively manage your rental properties then 3 Options Realty can be your best bet.

6 Signs You Need to Consider Hiring a Property Management Company

You Want to Own Rentals Out-of-State

If you don't live near your rental property, a property management company can handle tasks that require local presence like showing the unit, responding quickly to maintenance issues, vetting contractors, and more. While technology makes remote landlording easier than in the past, an on-site property manager is usually a must for out-of-state real estate investing.

Your Time is Limited

Landlording competes with many other demands in life. If you have a packed schedule, are highly focused on your career or business, have young kids, frequently travel, or simply don't want rental duties infringing on your free time, then delegating to a property management company could be wise. Paying 8-12% of monthly rent to access their systems and staff may pay dividends long-term versus burnout.

You Own Multiple Properties

It's fairly manageable for most people to self-manage a single rental home. But once your portfolio grows to 4, 8 or 10+ properties, the workload compounds. Have you ever gotten multiple middle-of-the-night maintenance calls or had two tenants give notice simultaneously? A seasoned property management firm has seen it all when managing at scale and has efficient processes to handle bigger workloads.

You Dislike Confronting Tenants

Collecting rent, enforcing rules and terminating leases are unpleasant parts of the job for any landlord when dealing with difficult tenants. If you want to avoid uncomfortable conversations around these issues then hiring a property management company makes sense. With their experience and systems, they're prepared to address challenges swiftly and pragmatically.

You Aren't Confident with Legal Compliance

Navigating landlord-tenant and fair housing laws can be complex, but non-compliance can spur lawsuits or hefty fines. If you don't feel qualified to handle security deposit accounting, properly vet tenant applications, validate reasons for lease termination, and meet other regulatory duties then consider outsourcing to a professional property management firm. They keep up with regulation changes so you have one less thing to worry about.

You Want Access to Value-Added Services

Beyond the basics of collecting rent and handling maintenance, some property management firms offer additional services individual landlords may not provide: detailed monthly financial reporting for taxes, 24/7 tenant portals for rent payment and requests, online listings to fill vacancies faster, insurance guidance to mitigate risks, yield analysis to inform pricing, capital planning to highlight upcoming expenses, and more. Access to these services can make property ownership less stressful.

Conclusion

In summary, hiring a property management company is something to consider if owning rentals remotely, lacking bandwidth, owning multiple units, disliking confrontation, needing access to value-added services, or feeling unequipped to handle legal compliance. However self-managing remains realistic if you just own one local property, want to maximize cash flow above all else, or have very low maintenance units and long-term tenants. Assess your situation to make the right property management decision for your rentals.

FAQs (Frequently Asked Questions)

Q: What are the main benefits of using a property management company?

A: The main benefits are saving time, reducing stress, gaining access to professional systems/processes, and not needing to confront tenants personally on difficult matters. Property managers handle maintenance, tenants issues, legal/regulatory duties, rent collection, accounting, advertising vacancies and more so you can focus on other priorities.

Q: What types of rental properties would benefit the most from professional property management?

A: Out-of-state rentals where owners can't provide local oversight, multiple units within a portfolio to handle increased workloads efficiently, and properties with frequent tenant turnovers or maintenance needs to reduce landlord responsibilities. New real estate investors may also want to start with management help while learning.

Q: What percentage of monthly rent do property management companies typically charge?

A: Industry standard fees range from 8-12% of collected monthly rent. Additional charges may apply for tasks like tenant placements/evictions or major maintenance projects. Be sure to understand all costs and get proposals from multiple companies.

Q: Should I avoid hiring a property manager to maximize rental cash flow?

A: Maximizing immediate cash flow is a valid concern, and self-managing does increase your take-home profits. However, consider if taking all landlord duties on-shoulders is sustainable long term without burning out and making hasty (potentially illegal) decisions under stress when issues arise.

Q: I just own one rental home locally. Should I still hire a management company?

A: Most industry experts recommend self-managing your first rental property, especially if located in the same city where you live. Handling tenant communications, basic upkeep and repairs for one unit is usually realistic without professional help. Reassess if issues become frequent or your portfolio grows.

Q: What questions should I ask when interviewing property management companies?

A: Key questions: Years in business, number of units under management, experience with properties similar to yours, all included fees/services, tenant screening process, maintenance request/resolution process, owner communication methods, rent collection process, eviction process if needed, and overall management philosophy.

Q: What legal compliance duties do property managers handle that individual landlords may overlook?

A: They oversee security deposit accounting in compliance with state laws, adhere to fair housing regulations during tenant screening/evictions, stay on top of Habitability requirements, modify leases for new local ordinances, report tenant default of rent for collection purposes appropriately, and more key requirements that unaided landlords may deprioritize.