Many people may feel that using a Property Manager to take care of their investment property is an unnecessary added expense. Some may even want to manage their property themselves if it is in the same town they are living in. And with so many Property Management options, it can be quite confusing. Therefore, from a presentation presented by Alture Properties’ Property Manager, Rinco Chan, I’ve compiled a list of the most common property management myths to help you determine if using one is right for you.
MYTH 1 – Only if you have many properties do you need to consider the need to have your properties professionally managed.
FACT – Even one investment property can take up lots of your time (and cost you lots of money), especially if you don’t know what you are doing. Property managers are trained to pre-screen for potential problem tenants, reducing future headaches and tenant evictions.
MYTH 2 – Anyone can manage a property, you don’t need to outsource to get the job done.
FACTS – Even if you have the time, do you have the knowledge of how to deal with tenant issues? If you have the knowledge, do you have the time to manage yourself?
Can you deal with the issues impartially and not let emotions get in your way? Most owners will get emotional when tenants tell them their sob story on why they can’t pay the rent on time. Owners then allow tenants to pay late and the next thing you know, a month or two has passed with no rent collected and then the owners start to feel the need to evict the tenant. With property managers, they are non-emotional with these types of stories as they hear it all the time. As they have owners to answer to, they take on eviction procedures according to tenant relation laws rather than waiting longer than necessary. This prevents months with no money collected for owners.
MYTH 3 – Managing a property is simply a case of managing tenants
FACT – Property Managers attract better tenants and will qualify those using credit, background and eviction checks.
FACT – Ownership of rental property is governed by many landlord tenant laws and regulations.
Learning all these rules and applying them properly is very time consuming, not knowing them can put you at great personal financial risk.
MYTH 4 – Only local properties can be managed effectively, not out of town properties
FACT – The systems put in place can be duplicated anywhere.
MYTH 5 – Property managers are not worth the costs involved
FACT – Using a property manager actually increases NET rental income because they charge “market rent” and leave nothing on the table.
FACT – Management fees are tax deductible but a landlord’s time when self-managing their own property is not.
FACT- When it comes to repairs/renovations, trades companies give larger discounts/higher priority when working with trusted PM companies.
MYTH 6 – I’ll lose control of my property.
FACT – Experienced property managers have handled many tenant issues before and can work with owners and tenants to resolve difficulties.
FACT – The property management agreement clearly states the responsibilities of the PM and the owner, everything is transparent and legal.
MYTH 7 – Managing my own investment property is easy.
FACT – Property Managers are able to anticipate the potential for many rental property problems, thereby mitigating impact from the start.
FACT – Property Managers are much more aggressive in rent collection; owners are more sympathetic to a tenant’s monthly excuse.
MYTH 8 – Property managers just accept anyone who wants to rent your property.
FACT – Property managers have more tools than the average landlord to screen and qualify tenants – they don’t want the headaches any more than you do.
MYTH 9 -Property managers are all the same, get me the cheapest one!
FACT – As an owner, you should communicate your goals clearly and interview PM companies to make sure they meet your needs. There are good managers, and there are extremely bad ones, therefore, it’s ok to ask lots of questions and to ask for current and past clients references.
MYTH 10 – Tenants don’t like to deal with Professional Property Managers and will seek out private landlords
FACT – Visit a few tenant “gripe” sites on the web and you will read what tenants really think about non-professional property managers.
FACT – Professional property managers have resources and systems in place to deal with tenant issues quickly and keep them happy.
MYTH 11 – Property management companies will care about my properties as much as I do.
FACT – Rarely will Property Managers care about your properties like it’s their own. It’s just a fact of life, it’s not their property, and they will treat it as their job.
In order to determine if you are suited to manage your own investment properties, ask yourself the following questions?
1) How much time do I have to oversee repairs and maintenance?
2) What if I am away for a week?
3) Would I know how to handle a problem tenant/eviction?
4) Why am I losing sleep over this?
5) Do I want that 3am phone call?
6) Why am I spending the whole day showing tenants the wrong property?
7) Why am I attracting the worse tenants?
8) What do you mean I have to pay to unplug your toilet?
9) How do I deal with bed bugs?
10) Why am I still doing this by myself?
If you don’t know the answer to even one of the questions above, it’s probably a good idea to hire a Property Manager.
Using a property manager saves time and worry over marketing rentals, collecting rent, maintenance, and repairs. It helps avoid the headaches of being a landlord but allows you to continue to reap all the benefits of an investment property. By having a trusted property manager, you can avoid tenant nightmares and any 2am maintenance issue calls will be directed to them, and not you.
Teresa Leung is an active Investor and Investment Realtor® (Keyspire™ Preferred Realtor®) specializing in helping people grow their wealth exponentially through the acquisition of strategic real estate investments. She is also CREW’s 2015 Finalist for Realtor® of the Year. www.pointBinvestment.ca.