Why Hire a Property Manager for a Rental

Why Hire a Property Manager for a Rental Property

Rental Investment vs. Self-Managed Rental. 

Weather you already own rental property, or you are planning to own rental property, you should consider the option of hiring a property manager. Although not every rental owner needs a property manager, it is in your best interest to understand what a good Property Manager can do for you. First, let me tell you the difference between a Rental Investment property and a Self-Managed Rental property.

  • A Rental Investment is a real estate asset you purchase hoping it generates income and appreciates in value over time. A rental investment requires a Property Manager for the administration of the asset.
  • Self Managed Rental OwnerA Self-Managed Rental is also an real estate asset but it is not an investment, it is a job or a business. Therefore, you are the property manager and your income is compensation for perfoming that job. 

Misconceptions About Property Managers

My first question when I meet a self-managed rental property owner is:

Why haven't you hired a Property Manager yet? The most common answers are:

  • I want to save that money
  • I like to be in control
  • It doesn't take much of my time, I don't have to do much

These are common misconceptions. Let's look at each of them in detail.

I want to save that money

On the surface it may seem that self-managing your rental property will save you money. Yes, you don't pay the management fee, but this is a miscalculation that doesn't take all variables into account.

From a wider perspective, not having a property manager will most likely cost you more than the perceived savings. Experimenting with rental property management or learning on the go can be an expensive endeavor for many reasons. For instance, you have a higher exposure to avoidable repairs, appliance swapping, property damages, penalties, tenant lawsuits, and evictions, just to name a few.

A Property manager's fee is usually between 8-12% of the rent. In return you get a bookkeeper, lease enforcer, supervisor, cost manager, rent collector, and customer service for your tenants. This is exactly what you need to keep your rental investment property productive, compliant, maintained, and your tenants satisfied.

I like to be in control

Property Management Financial ReportsIf you have a hard time giving up control of your rental property, maybe you should consider one important fact. A good property manager will provide 24/7 access to reports and data of your rental property. As a result, you'll be able to see the performance of your investment at any point in time - work orders, state of repairs, lease agreements, financial reports, and more. Truly, a property manager gives you better control of your investment.

Another downside to self-managing rental properties is that you become your own obstacle, a micromanager. For this reason, you can't expand and diversify your investment portfolio when you are too busy being a landlord. Remember, if you work on your rental property, you have a job, not an investment. 

It doesn't take much time, I don't need to do much

Maybe being a landlord doesn't take too much of your time, but that doesn't mean you are doing it properly.  We all have limited time and skills, yet the amount of time and skills required to manage a successful rental property is often underestimated.  Ask yourself these questions:

  • Am I doing "all"  a property manager should be doing? (See the list in the next section)
  • Am I doing it correctly and in a timely manner?
  • Am I compliant with regulations?

Assuming you answered "yes" to the previous questions, ask yourself what your opportunity cost is. That is to say, evaluate what you are giving up in order to be a self-managed rental owner:

  • Could I be more productive doing other work?
  • Could I be doing other activities I enjoy?

You may have a job already, or you may own a business or maybe you are retired. Regardless of your main source of income, unless you plan to be a full time landlord or property manager it is more efficient and productive to spend your time on your real job or business, your family, your hobbies, and investment planning.

What a Property Manager can do for You

These are some of the services that you can expect from a property manager.

  • Deyfra Services - Why Hire a Property Manager for a Rental PropertyRent Collection
  • Late Rent Collection
  • Handle Tenants' Requests
  • Lease Administration
  • Post Violation Notices
  • Tenant Online Portal
  • 24 hour Emergency Support
  • Routine Inspections
  • Tenant Credit/Criminal Check
  • References and Employment Verification
  • Move in/out Inspections (Reports and Media)
  • Secure Renter's Insurance
  • Pay Vendors
  • RFI (Request for information)
  • RFP (Request for proposal)
  • Vendor Screening
  • Contracting Vendors
  • Schedule and Supervise Vendors
  • Maintenance, Repairs and Improvements
  • Regulation Compliance
  • Investor Online Portal
  • Financial Reports
  • Cost Management
  • Monitor Insurance Coverage
  • Appliance Tracking
  • Process Mail
  • Accurate Bookkeeping
  • Rental Commission Discounts
  • Maximize Rental Income
  • Electronic record storage

Implicit Benefits of Using a Property Manager

Besides the obvious assistance that a property manager provides, there are added benefits to having a property manager.Rental Investment Owner

  • Peace of mind
  • Focus on yourself and your family
  • Focus on investment planning
  • Faster growth of investment portfolio
  • Lower risk exposure

Do you need a property manager?

The short answer is that if you want your rental property to be an investment, you need a property manager. But If you want another job, then you should self-manage your rental property.

I hope this information helped you determine if a property manager is right for you. There is a saying that the two happiest days of a boat owner's life are the day they buy a boat and the day they sell it. Don't let your Rental Property turn into an unwanted asset. A competent Property Manager will make of you a proud, successful, and worry free rental investor.

See you soon!



AC Drain Line Overflow Switch

Air Conditioning Maintenance Tips

Most Common Air Conditioning Problem.

Air Conditioning (HVAC)Of all the appliances in your rental investment property, the air conditioning is among the most expensive to replace or repair.  You should know that a monthly 15-20 min job and around $10 in materials can increase  your chances of uninterrupted air conditioning operation.

The inside unit of a central air conditioning system (HVAC) takes humidity from the air inside the property to condense water into a drain pan which then flows through a pipe outside the property and into the ground.

In this humid environment grows a slimy substance made of algae, mold, mildew and other organic particles. This slime can grow quickly to block the flow of water.

When the pipe clogs the water can overflow and it will cause water damage to flooring and walls. Additionally If the problem is not identified or notified by tenant in time your chances of having a toxic mold problem in the property are pretty good.

AC Drain LineSome air conditioning units have overflow safety switches. These switches turn off the air conditioning at the first sign of an overflow, but they are not 100% reliable. Remediation for water damage can get very expensive. Your best bet is to perform regular and proper maintenance. Here is a list of the items you will need, and instructions of what I recommend you should do every month:

Tools and supplies
Materials AC maintenance

  • Small plastic funnel
  • Disposable AC filters (buy in bulk or packs)
  • Paper towel
  • Trash bags (recycled plastic grocery bags)
  • Drain Pan tablets
  • Chlorine bleach.
  • Duster or similar.

Instructions (Monthly)

  • Replace the  AC filter, because an AC with a dirty filter,
    • Runs at lower efficiency
    • Uses more electricity
    • Runs longer "on" cycles
    • Has shorter life expectancy
    • Releases particles that clog the coil
    • Releases allergens
    • Coils freezes up
  • Pour 1 cup of chlorine bleach in drain lineAC bleach drain line
    • Use paper towel to prevent and clean any spillage.
    • Remember chlorine bleach will discolor carpeting, and fabrics and oxidize some metals.
    • Always use a funnel to pour 1 cup of chlorine inside the drain line.
  • Place 1 pan tablet in drain pan:
    • The pan tablets prevent the formation of slime in the AC drain pan.
    • They also keep the water in drain pan cleaner.
  • Clean dust in AC closet:
    • Dust the surface of the AC, closet floor/walls and  closet door.
    • This prevents unnecessary dust from going into the filter.

What else do you gain?

  1. Assurance that the scheduled maintenance is being performed.
  2. Monthly inside access to property without scheduling an inside inspection with tenant. A free AC filter change is less intrusive than a property inspection.
  3. Improved air quality for the tenant.
  4. Property has an added value over comparables - complimentary AC maintenance.
  5. Significantly reduced frequency between coil cleanings. I manage properties that have gone 5+ years without requiring a coil cleaning or having to unclog the drain line.
  6. Reduced tenant service inquiries. This method reduces operating expenses while increasing tenant satisfaction. Two items that are usually inversely proportional.

Should you DIY or hire a Pro?

If you are a hands on landlord and self manage your properties then this service is so fast and easy that you might want to do yourself or in-house.

But if you usually outsource maintenance and repairs, then you should hire a professional to do it. You will find that your local air conditioning companies often offer affordable monthly service plans and most guarantee their services for added peace of mind. If you live in Fort Lauderdale, Weston, Plantation, Sunrise or surrounding areas send me a message and I can point you in the right direction.

Ultimately there is a third option, but I'd use it as a last resort. You may provide the tenant with the materials and instructions to perform the service. This is less desirable because you can't be certain the tenant is actually doing it.

Don't let the lack of planned maintenance be the cause of tenant service calls and expensive repair bills.

Happy Landlording!