To Hire or Not To Hire A Management Company? That is The Question.

You've got some properties in your real estate portfolio and you've either discovered that you stink at managing them, you just hate it more than anything else in the world or you were good at it but are just tired of doing it. What are your options at this point?

Well, you could look into a management company that will take care of all of the tenant screening and placement and property maintenance, repairs and evictions. Some questions to ask yourself before you consider doing this might be do you have enough properties or type of properties that a management company will even consider. If you only have two single family homes then you may be hard pressed to find a management company that will want to take your business. If in fact you were able to locate a management company that would take you on, do the services of the management company warrant the cost? Are you going to still be able to make a profit after they take their pound of flesh? Chances are you are not going to make a profit with them involved.

If, on the other hand, you have quite a number of properties and they are large enough for a management company to consider there are still some things to think about before signing on the management company's dotted line. Ask them if they own and manage properties in your area. Chances are if they do, their properties will take priority over yours. Make sure you check their references. Have them give you the names of past and present clients--the more, the better. Call those people and ask them for the good, the bad, and the ugly. You want to make sure that you get as much information on the management company's performance as possible and the satisfaction level with their clients.

If after all of that you decide to go with a management company, then make sure that you have your attorney look at the service agreement. Once all parties are satisfied with the terms sign it and go. One of the terms of the agreement to keep in mind is setting dollar limits for repairs. If a repair has to be made, you would want the management company to call you for approval if it is going to be over a certain dollar amount. You don't want them fixing every little thing and then finding out at the end of the month that you had no profit. Another term on the agreement would be the percentage that they are going to charge you. They will most likely base it on your gross rents and it can be anywhere from 5-10% based on your properties, the management company, and your area.

For those of you with a smaller real estate portfolio or predominantly single family properties, put an add in the local paper looking for a maintenance person. Pay them for being on-call. Determine an amount based again on a percentage of the gross rents of your units. Chances are you may find that you can locate an individual who will handle everything for quite a bit less than a management company might.

Management companies can be a lifesaver if you find the right one and if you want to sacrifice some of your profit. If you believe it is worth your piece of mind to hand over 5-10% of your gross rents then more power to you, as it may very well be worth it! Just make sure you do your research, pick a great manangement company and stay in control.

Matt Bodeman and Scott A. Rozanski are the "Millionaire Real Estate Pros." They have been helping others discover how to make huge profits in the acquisition of undervalued properties for years. In just the last year and a half alone, they have purchased over 50 properties using no money of their own and made millions of dollars. If you are interested in discovering how to make big money in real estate, please visit them at http://www.millionairerealestatepros.com for your FREE report!