The age old question ‘should I use a property management company?’ should always be considered from investor to investor, because there isn’t one answer to suit you all – we wish there was!
Property management companies can be really useful for some, but for others you can end up paying a lot of money for not much value. In this article we’ll take you through what a property management company could potentially offer you and how they can help out with when it comes to your investment property.
Give it to me straight! What will they do?
A property management company will take (some of) the effort out of managing your property, cause there’s a lot to do and a lot to keep on top of. Hiring a company will take on some of the responsibilities such as;
- Advertising your property
- Conducting inspections
- Finding and screening tenants
- Completing condition reports
- Assisting with rent prices including rent reviews and recommendations
- Collecting rent
- Handling and organising maintenance requests
- Responding to tenant complaints and evicting bad tenants
Of course, these aren’t all the tasks a management company will handle for you (if you want the full list, see this article) but you get the idea. They’re there to deal with the day-to-day and get you the most out of your investment.
Property management companies can be a great option for those who are new to the game and don't mind paying extra to get expert advice. That being said, not all property managers are created equal, some will do a better job over others so you do need to do research into the one you choose, as well as keep on top of them if you do sign up. Having an agreement with a property management company isn't a free pass for you to tap out of anything to do with your investment property and just wait for the money to roll in.
How much will it cost me?
Using a property management company sure has its advantages (IF you score a great property manager) but they don't come cheap. Just like anything, property management fees and charges vary and you’ll need to do your research. As a guide, they can charge 7-11% of your monthly rental income plus expenses as well as other fees on top of that percentage, each will be different.
Taking on a property management company is the most expensive option compared to self managing or using a property management platform – like Cubbi – where we help you with self-management and make it simpler without the huge fees that come along with using an agent. There are lots of options to suit different budget and lifestyle, we’d always recommend picking the one with the least amount of hassle and the most amount of money for you – obviously!
Do I have to use a property management company?
Not at all. As we’ve mentioned above there are other options for those who really don’t feel like waving goodbye to a chunk of their rental income in exchange for playing phone tennis with their property manager. You can self-manage if you have the time and patience, or you can use the Cubbi platform, pay a lot less in fees and still get someone to (virtually) hold your hand through managing your property.
Already have a contract with a property management company but not sure what they’re actually doing? This article is what you need to read to make sure you’re getting what you should.