Property management could be very important if you have multiple properties to manage and could lead to higher tenant retention although this service would cost you more than managing the real estate property yourself. In the end you need to do a cost benefit analysis about how much you are ready to pay for the convenience of getting someone to manage your property.
Common Advantages of property management are:
Convenience: It is definitely more convenient and much easier to maintain a property with a property management company. You are not worried about getting a phone call at 12 am in the night from your tenant if the tap is leaking at your property.
Not dealing with the tenant: Some of us do not like the idea of interacting with the tenant, specially if it could be an uncomfortable experience. Some tenants just have a habit of bothering the landlord very frequently and it could be unpleasant experience. Hiring a property management company can certainly help avoid discussions and unnecessary interaction with the tenant.
Legal Services: Property management companies usually have a paralegal as part of their team in case the tenant refuses to vacate your property or if you need to send any notice to your tenant. Having these legal services is an advantage of hiring a property management company although they could charge you significantly to resolve any matter and for court appointments.
Maintenance Services: With a property management company, you are not worried if anything leaks or breaks down.
Finding a tenant: Your property management company can help you screen and find tenants if you do not want to hire a realtor to do so. They can do this at a fraction of a cost of a realtor and it works if the market is hot. Although getting a realtor will give your listing more exposure.
Common Disadvantages of property management are:
Monthly cost: Most property management companies charge a flat monthly fee which could approximately be equal to 10 percent of your rent. This is a fee you would need to pay if there are any maintenance issues or not.
Cost for repairs: Many property management companies will charge you higher than market rates for getting the repairs done and some of them have a higher hourly rate. You could choose to find your own maintenance people if your property management firm allows it and this could keep your costs low.
Legal costs: Cost for a paralegal if your tenant defaults could be higher than anticipated. You can do the paperwork yourself if you wish to save money.
In summary hiring a property management company could make your job as a landlord much easier but there is always a price to pay as this arrangement could cost more and eat into your net profits from the rental income.