One of the most important attributes required to be a successful landlord is strong organisation skills. This is because managing rental properties requires more than just finding a tenant and collecting rent.
While many landlords find managing one or two properties doesn't interfere with their personal life, it's very common for landlords to become overwhelmed with regular issues such as maintenance tasks, finding new tenants, dealing with rental arrears, legal obligations, and so forth.
This is why thousands of property investors resort to hiring a professional property manager. In exchange for a percentage of their monthly rent, landlords can have the peace of mind that their properties are being managed by professionals.
In short, a professional property manager will do everything you should be doing—but how do you know if you need one?
Here are 4 signs it might be time to hire a professional property manager:
1. It's taking up too much of your time
Being a landlord isn’t a run-of-the-mill 9 to 5 job. Landlords need to be available 24/7 to handle any unforeseen issues that may arise. For example, if a landlord hasn’t thoroughly screened and checked tenants prior to move in, some hidden red flags could be missed along the way.
Handing over the keys to a bad tenant carries the potential for late rent payments, damage to the property, constant complaints, or even an eviction—all of which are extremely time consuming and stressful.
Then there's maintenance—have you ever had a call late in the night from a tenant who's bathroom has sprung a leak and the job needs immediately seeing to? Or heavy winds have broken the fence panels in the garden which has now made the garden accessible to anyone? Or maybe there's a problem with the lock and you need to find a local locksmith fast. These necessary tasks can take up hours of your time—time which could be best spent with your family or friends.
If you're spending more time than you're comfortable with managing your rental properties, it may be a good time to get some quotes from a local property manager. Some have fixed packages for you to choose from, and some, like Elavace Estates, can let you build a bespoke management package that suits your circumstances.
2. You have a high vacancy rate
Void periods are the number one nightmare for landlords! On the off-chance that you don't know what a void period is, I'll explain in simple terms:
A void period is a period of time when your rental property is unoccupied. It starts when your last tenant leaves and ends when a new tenant moves in.
Once you have a tenant in place, your rental income is usually secure for the next 6+ months—providing all of the proper reference checks have been carried out—but what happens when your tenant is ready to move out at a months notice?
Unless you can find a new tenant ready to move in, you're facing a void period.
The reason why void periods are the biggest concern for landlords is that during this time, no rental income is being earned. So it's very important that void periods are kept to a minimum—particularly if you rely on rental income to cover your mortgage payments.
The marketing of a rental property can directly help vacancy rates if done correctly. After all, finding the best possible candidates to inhabit your property requires advertising the property in areas able to reach the best possible band of applicants. Whether you choose to use old-school tactics or more modern digital marketing tactics, there’s no escaping the great deal of stress advertising a property will bring.
Once your property is tenanted, your rental income should be secure for the next 6+ months. But finding the right tenant to fill your property will involve thorough referencing.
Speaking with previous landlords may help discover that a certain tenant has a tendency to occupy a property for 2-3 months before moving on. This might be due to a lack of job security and for that reason, they maybe frequently moving to different locations in order to commute to and from work.
Taking on a tenant who has a history of late rental payments or leaving mid-contract could signal unexpected void periods and loss of earnings on your part. This is why it's so important to run thorough credit and reference checks on all of your applicants.
If you're regularly facing void periods that are costing you money, it may be time to think about hiring a property manager who can manage and market your property for you.
3. You’re managing multiple properties
Developing a property portfolio is undoubtedly one of the best ways to accumulate long-term wealth. That being said, it is certainly not as easy as it looks.
Managing one rental property can often prove to be restraining on both time and energy—but when one property becomes two, and two becomes three, it's a completely different game altogether.
Taking into account that a landlord carrying the full weight of the responsibilities must handle the advertising, marketing, maintenance, tenant requests and so much more, managing multiple rental properties quickly becomes a full-time job.
When there are multiple properties being managed, the recurring problems can lead landlords to neglect the properties entirely—which is a recipe for disaster.
More often than not, the problem is not the property but instead the mistake of not having a property manager to run things for you.
They can be there to handle every frustrating phone call and assign a team of specialist managers to handle to work on different aspects of each property. Naturally, the landlord can adopt a more passive role and focus on doing things they actually enjoy doing, along with the occasional reminder that they are still a landlord!
4. Spending more money than you make
The typical mistake that many landlords make in the initial stages of their journey into property investment is believing the best way to maximise returns is to do everything themselves.
While on the face of it, this may seem like a good idea at first. But within a few weeks, landlords will start to notice unexpected expenses. This can happen in many different ways which any novice might not have considered before taking on this huge responsibility.
For example, maybe you have a tenant who hasn't paid rent in over 3 months and has stopped responding to your phone calls. How do you resolve this situation?
Serving an eviction notice is usually the next step, but if this isn't done correctly under the terms of the Landlord Tenant Act, you could be setting yourself up for an expensive and timely legal battle during which you will be earning no rental income and incurring legal costs.
Professional property managers are commonly hired by landlords who live too far away from their rental property. This is because there will be issues like this that arise and are impossible to deal with from many miles away. Therefore, the landlords presence will be required which then means that they must travel all the way to the property location which can also be both time consuming and expensive.
Another reason why a landlord might be spending more money than necessary is not having the best contacts to handle expensive problems which are likely to occur. Every time a tenant reaches out, it is critical that issues are dealt with in a timely manner. Failure to do this might lead to tenants becoming more relaxed in their relationship with you and as result, not notify you of minor problems that can quickly turn into big ones.
With the help of a property manager, you can find the most cost-effective and reliable tradesmen to handle any of these issues. This is because property managers have strong relationships with maintenance workers, tradespeople, contractors, suppliers and vendors, so they can get the best work done at the best price possible.