The US is home to around 43.6 million renters. Then, divide that number among fifty states, and weigh that we’re discussing Philadelphia, a city recently cited as one of the nation’s most competitive rental markets. Provided you’re a landlord in the area or wish to be, you’ve made–or will be making–a wise investment.
On top of that, the average rental price for a unit in Philadelphia, just under 800 square feet, is $1,900 per month.
That’s bordering on $23,000 of extra annual income! If you own multiple properties or a larger property with room for numerous renters, the possibilities for profit only skyrocket.
At the same time, an insightful businessperson like yourself knows there’s always more to the story. Purchasing rental properties isn’t–in and of itself–a license to print money.
First and foremost, you must manage these properties to maintain a standard that attracts quality tenants. Common sense then dictates the more rental units you have, the more challenging manage all of your properties on your own.
This last notion begs the question: how many units can one person manage?
At the beginning of your career as a landlord, DIYing property management has its theoretical advantages, especially if you’re handy and only have one unit to handle. The benefits are as follows:
Even then, industry experts suggest setting aside or “paying yourself” as a property manager with 10% of your projected rental fee.
Yes, you’re putting money aside, but you’ll also be able to better project your returns to see if your properties will turn a profit. In fact, you should weigh this 10% before purchasing the property to ensure it’s a worthy investment. Then, by factoring in the hypothetical property management costs, you’ll know how to fit a property manager into your budget.
Upon yielding success as a DIY landlord of a property or two, it will likely make sense to scale up. In this case, even the most hands-on landlord must outsource to avoid the resulting headaches if you don’t hire outside help.
There’s no one-size-fits-all answer to when to say goodbye to DIY. Still, the answers to the following questions will help clarify if you need to outsource property management in Philadelphia:
How Many Rental Properties Do You Own?
A single-family residence–with an ideal tenant–might be easy to manage in your spare time. However, multiple properties call for far more from a landlord. Multi-family units present the same challenge.
The general rule is more units, and more occupants mean additional responsibilities and extensive demands on your time. In other words, the more rental properties you have, the more you need to hire a property manager.
How Flexible Is Your Schedule?
Do you have another full-time job? If so, balancing your career with the duties of a landlord and a social life might require outsourcing property management in Philadelphia. This answer rings true even if you only rent out one property.
Are Your Properties Local?
If you’re from outside of Philadelphia and your property is here, you’re better off outsourcing your property management in Philadelphia. Sure, living a few cities over isn’t a big deal. However, anything more than an hour away can prove a massive inconvenience–especially during tenant-based emergencies.
Do You Have An Affinity For Property Management?
Quality of life is paramount; managing even one property might make you miserable if you don't enjoy property management. That said, you can still–maybe–manage one property if you have great tenants. However, as you scale up, you’ll be unhappy with the rising demands of renting out multiple properties.
Are You Knowledgable About Landlord-Tenant Laws?
Here are crucial landlord-tenant laws you need to be comfortable with as a landlord:
These issues can prove sticky even with one unit. If you’re worried about ending up in court, outsourcing property management in Philadelphia can keep you on the straight and narrow.
Are You Struggling To Fill Vacancies?
As your property portfolio grows, so may your vacancies. Two months of lost rent due to vacancies could cost more than it would to outsource your property management in Philadelphia. So, it only makes financial sense to hire someone to help fill those vacancies–like a property manager.
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