When you decide to become a real estate owner, one of the major decisions you will have to make is when to hire a property management consultant.
It is a hotly contested issue on when is the right time to hire a property management consultant. Is it when you buy your first property, your tenth, or your hundredth?
The simple answer is this: you should hire a consultant when you feel that you need one. Whether that is when you own one or multiple buildings will ultimately be up to you.
There are several factors that will let you know that you need a property management consultant. Keep reading to learn a few of those factors and how you'll know when the right time is to hire help.
Multiple Properties
Based on the title of this article, one of the main factors that will signal that you need a property management consultant will be the number of buildings you have. The more properties you own, the greater the need to hire one.
You can probably efficiently manage a single property that you own—assuming the tenants aren't particularly difficult, your property is in good repair, and you don't have a full-time job that keeps you busy around the clock. In most cases, when the number of properties increases, the need for help increases as well.
Hiring a property management consultant means not having to be in multiple places at once. The property manager will offer a lot of help in managing your properties more efficiently and profitably.
Limited Time
Time is the single most valuable resource on the planet, mostly because we all have a finite amount of it. If you have a single property and work part-time or are retired, you might have the time to manage it. But once you own ten buildings, even if managing them is your full-time job, your time will be stretched thin keeping up. It is impossible to manage a hundred buildings on your own.
You may prefer being a hands-on real estate owner, but the demands on your time might be too much for you to do it. It is especially so if you have another job or if you're hoping to spend some time looking for your next profitable investment property.
The day-to-day tasks of managing a property are particularly taxing and time-consuming. Once you have ten properties, the time constraints will probably necessitate the hiring of a property manager.
You Live Far from Your Properties
In today's world, you can invest in real estate anywhere on the planet as long as you have the funds. The downside is that you simply cannot personally manage properties that are too far from you.
Therefore, if you live far from your investments, even a single property could warrant hiring a property management consultant. The transportation costs alone would be enough to offset the return on your investment.
The physical and emotional toll of having to manage properties that are far from your residence is also significant. A property management consultant who lives close to the property is the best option.
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You Can Afford Property Management
A common misconception is that just because you own a property, you make enough to hire a property manager. Unless you have a humongous budget or have an extremely profitable investment, this might not be the case.
If you only own a single-family building, then chances are that you don’t have enough from your rent to hire a property manager. On the other hand, if you own ten or a hundred buildings, then odds are that you have a sizable budget; sufficient to hire a property management consultant. In fact, one or two larger units may bring in enough profits to make hiring help a smart investment.
Regardless of the number of buildings you own, what matters is your ability to afford property management without cutting too far into your profits.
Hands-On Landlord
When you purchase a property, you can either become a landlord or only an investor. There are real estate owners who like to be hands-on landlords and others that like to observe their investment from afar.
Which you choose will help you decide whether you need a property management consultant. It really does not matter whether you own one, ten, or a hundred buildings. If you are not the hands-on type of landlord, then a property manager is the suitable option.
There are pros and cons to being an involved landlord. The cost of hiring a property management consultant might just be lower than that of managing the property yourself.
Becoming a real estate owner is a major life decision. Owning multiple properties is even more serious. Whether you will need a property management consultant or not will depend on more than the number of properties you own. The above factors will signal whether you need a property manager or not. The key is to be clear about your goals, including both now and in the future.
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