As recently stated in Realty Times by Blanche Evans, investors can end up paying up to one month’s rent in property management fees over the course of one year.   At $60.00 per month for one house, for example, that amounts to $720.00 annually.   That seems to really bite into your revenue, doesn’t it? 

Well consider this.  At $60.00 per month what you’re really paying is $2.00 per day for a team to look after your property.  Over an eight hour period that equates to just 25 cents per hour.  

For 25 cents per hour, would you prefer that you pursue new investment opportunities while someone else spends time fielding maintenance or repair issues; dealing with tenants or marketing for tenants; collecting rents and working on accounting; overseeing mortgage and tax payments; generating reports and preparing tax records?

On the flip side, what’s your time worth?  Do you think it’s worth say $100.00 per hour?  If so, even if you spent just 30 hours a year on managing one property, you’ve lost $3,000.00 of your time during that period on that one property alone.  $3,000.00 or $720.00 per year---which approach do you think offers the smarter, higher value-to-cost ratio?  Now multiply that by the number of properties you own.  What you’re likely to see is that the value of the property management firm approach increases while the value of your doing it yourself is inversely sharply reduced.  And if you’re an out-of-state investor your costs to self manage increase substantially.

Now granted, the true return on property management services depends upon the quality and reliability of the firm.   But as you would when you’re evaluating a property for investing, do your homework.  Then sign with a reputable property management firm.  You will reap the benefits in terms of time, money, and value.