February 15, 2023

Should I Hire a Property Manager? 6 Pros and Cons

Compare hiring a property manager vs. self-managing and learn 8 ways landlords with property managers can benefit from Azibo

Should I Hire a Property Manager? 6 Pros and Cons

As a landlord and real estate investor, you know how overwhelming it can be to manage rental properties from a distance. Between maintenance repairs, showings, screenings, and rent collection, it’s essential to have someone available to handle the day-to-day responsibilities (and unexpected emergencies) that come with owning a rental property. 

At some point, many real estate investors find themselves asking: Should I hire a local property manager? Read on to learn the pros and cons of outsourced property management, and how tools like Azibo helps support landlords and property managers strengthen their partnerships

What does a property manager do?

As their name suggests, property managers have a wide range of responsibilities. They're generally responsible for the overall upkeep of your property, managing communication with tenants, and filling vacancies. Their duties range from marketing the property and preparing for showings, to collecting rent, screening tenants, responding to maintenance requests, and even pursuing evictions. While each property manager's list of activities will depend on factors such as property type, location, and local regulations, there are several common responsibilities shared amongst them, including (but not limited to):

  1. Advertising vacant properties, screening prospective tenants, and executing leases
  2. Collecting rent from tenants and ensuring that rent payments are made on time
  3. Ensuring that the property is well-maintained, that repairs are made promptly, and that routine maintenance tasks are performed on schedule
  4. Ensuring that tenants are satisfied with their living or working conditions and that any issues or complaints are addressed promptly
  5. Managing the property's budget, including expenses, revenue, and profits
  6. Ensuring that the property complies with all relevant laws, such as fair housing laws, building codes, and zoning regulations

While some landlords self-manage their properties, hiring a property manager can help save you time and even money by ensuring that properties are well-maintained, tenants are happy, rent payments arrive on time, and more. 

The benefits of hiring a property manager

  • You save money in the long term. Yes, it's pretty well-known that property managers can charge upwards of 10% of your rental income, but in the long run, they can save you money. This results in many landlords who hesitate to hire property managers because of the fees, and as a result, aren't maximizing their cash flow over the years. Hiring a property manager will help you protect your investment by staying on top of maintenance issues to avoid costly repairs - for example, a single instance of water damage that isn't quickly addressed can easily surpass the cost of a property manager. They also help you maintain positive cash flow by enforcing on-time rent payments and filling vacancies quickly. 
  • You save time. For many people, investing in rental properties is a great source of income — but it’s often not their full-time profession. That means in addition to their day job, many landlords are responsible for communicating with tenants, collecting rent, fulfilling maintenance requests, preparing for showings, and more. Hiring a local property manager means you no longer have to spend hours upon hours handling the day-to-day responsibilities of owning rental properties, and instead can focus on other areas of your business or life. 
  • You can reduce tenant turnover. Successful property managers are responsive and available, addressing questions and concerns as they arise — and in turn giving tenants the best experience possible. By creating a great experience for tenants, local property managers can help landlords reduce tenant turnover and avoid vacancies. 

The drawbacks of hiring a property manager

  • Less control and potential oversight. Kellie Tollifson, MPM® RMP® and former President of the National Association of Residential Property Managers (NARPM®) said when determining whether to hire property management, the number one question landlords should ask themselves is “Are you willing to give up control of your properties?” If the answer is no, Kellie says they should continue to self-manage. Hiring a property manager means handing over the day-to-day processes associated with your rental property to someone else — and accepting that they may not approach every issue the same way you would. 
  • High costs. While property managers can help alleviate headaches for landlords, the costs associated with property management can eat into your profit margins. Whether your property manager charges a percentage, flat fee, or per-project rate, the average cost ends up being about 7-10% of your monthly rent. Determine whether your rental property investment will still hit your desired profit margins before bringing on a property manager. 
  • Complex contracts. While property management contracts vary depending on who you hire, be sure to read the fine print before signing. Landlords should always understand details about their property managers’ after-hours work policy, tenant screening criteria, and renewal policies (among other things) when they enter hiring negotiations. 

How do property management platforms like Azibo help landlords who use property managers?

Azibo is a one-stop-shop for landlords’ financial services needs. Our integrated platform provides free tools for landlords and their property managers, including free online rent collection, fully-featured financial management, real estate accounting & tax prep, Schedule E classification, bill pay, insurance, and much more. 

Landlords and property managers alike use Azibo to collaborate and better manage rental property finances. In fact, Azibo’s CEO lives in Nevada but works with a local property manager for his rental properties in Ohio. 

Here are eight ways landlords who use property managers can benefit from Azibo’s platform: 

  1. Azibo is free for landlords and property managers. If you’re worried about how hiring a property manager will impact your profit margins, you can eliminate the cost of expensive property management software by switching to Azibo. And yes, Azibo really is free — instead of charging recurring fees like traditional banks and property management software companies, we make money in other ways so we can provide our core service at no cost. Learn more about our business model.
  1. You can sign up for Azibo using your LLC or other alias, rather than using your own personal details. This is ideal for landlords who want to keep their identity private when communicating with tenants or paying vendors.
  1. Azibo offers shared visibility into property management. A strong relationship between property managers and landlords guarantees smooth management processes and satisfied tenants. Azibo allows you to create portfolios of properties to share with property managers, so that you get full visibility into your entire portfolio in one place — while property managers only see the properties they manage. In fact, you can share different portfolios with different property managers while you, as the landlord, have access to all portfolios and properties.
  1. Azibo provides real-time rent payment status so landlords always know who has paid and who hasn’t. And, by linking all of a landlord’s bank accounts and providing the ability to tag transactions by property and expense type, Azibo allows landlords to manage all of their portfolio finances in one place.
  1. Pay bills and return security deposits online with Azibo. Easily make payments to vendors, partners, property managers, and tenants for free. Our high transaction limits are designed with landlords in mind. 
  1. Azibo offers one-time invoices. If you need to bill your tenant for a one-time fee or payment, you can request money easily and efficiently with a one-time invoice. This addresses fees or payments outside of monthly rent collection, including late fees, pet deposits, and more. 
  1. Streamlined bulk tenant onboarding helps property managers and landlords set new tenants up to pay rent more efficiently. For a limited time, we’re offering our white glove service, Azibo Premium Onboarding, to eligible landlords for free (it’s normally $25/tenant). You'll get a dedicated support representative to guide you and your tenants through the setup process so you can quickly start collecting rent online with Azibo. To sign up, schedule a call with Azibo today. 
  1. Azibo simplifies tax preparation and expense management. Come tax season, many rental property owners painstakingly pore over spreadsheets and bank statements in order to make the most of their deductions. With Azibo, landlords can easily tag transactions by property for up to 24 months of expenses, or even tag expenses in non-Azibo linked accounts. You can also use Azibo to tag expenses by property and Schedule E category to quickly itemize deductions when it’s time to file.

Hiring a property manager is definitely a major step for landlords. By determining your priorities when it comes to saving time versus saving money, you’ll be able to make an informed decision for your real estate investment.