I just finished my first year of working with a property manager. Previously I had been managing my own rental for the prior 3-4 years. It was my first time as a landlord, and I think I kind of lucked out getting good tenants who paid rent on time, took care of the house, and even did some upgrades at their own expense and with m permission.
The second time around I was having more trouble renting it. I was getting all Section 8 Tenants. You hear nightmares about Section 8, and I hate the Government intruding in my life in any way and the State Government is an absolute nightmare so I figured if I was goign to do Section 8 I didn't want the hassle of dealing with it myself and decided to hire a property manager.
They charged me $250 for a tenant finder fee which I found to be pretty reasonable since many property managers charge 1 Month rent which in my case would have been $1400.
They also charge me 10% of the rent each month which is pretty standard among property management companies and comes in at $140 per month. When handling the rental myself I didn't bother getting a license from the City, who are they to tell me what to do with my property and extort $100 out of me, however using a property management company they do it by the book and that cost me an extra $100. I also had to do some improvements such as putting in a garage door opener even though I lived there for years without one so some extra little stuff like that cost me a few hundred extra as well.
I was kind of surprised how much I paid this year in repairs and management fees. The repairs couldn't have been avoided, I had one fluke incident of vandalism where someone busted out all my downstairs windows and sliding glass door. I also had a pipe explode, a tree that needed to be taken out, and a toilet valve repair. That stuff just comes with the territory and came to a little over $2,000.
The management fees which includes the tenant finding fee, lease renewal, monthly management fees, and repair costs which they charge me 10% of repairs to oversee them came to almost $2200. That is money that I could pocket, if I was willing to take tenant calls, collect rent on my own and oversee repairs myself.
When using a property manager and things are running smoothly it feels like your throwing away money because your paying 10% for them to do nothing more than collect a check. When things aren't going smooth however whether it be a tenant not paying rent or repairs or accidents, they will file a 5 day eviction notice with the court, they will handle repairs, basically it takes a lot of work off you and you won't be fielding repair calls at 2am on a Holiday.
All in all if I had to do it over again I think I would use a property manager despite the fees and costs. While I'd love to have that extra $2,000 each year in my pocket, I like the idea of my investment rental property being completely passive and I'm willing to pay for it. It also helps that I have a nice margin on my property which allows me to sustain these costs.
I'm not a real estate expert, I've been a landlord for about 6 years and currently only have one rental property although I am looking to expand into more and develope a portfolio of rental properties. I'm curious to hear your guys experiences. Do you have a rental property or are you a landlord? Do you self manage your property or do you use a property manager? What has your experience been?