What Do You Pay a Property Manager For?

I think that’s a fair question.

This post is meant to help you solve the property management vs. self-management debate.

I’ve heard that from 50% to 80% of all rental properties in the United States are managed by the actual homeowner and not a professional manager. In fact, when we discuss our services I know people are thinking it, though they rarely asking it… “What am I paying you for?

What really are the reasons for hiring a property manager and what do their services include? Why does property management seem like such a “nickel and dime” business?

I’ll do my best to tackle under what circumstances it makes sense to hire a professional manager and also help define their scope of services.

Reasons you would hire a manager:

1. Saves you time when marketing

One of the biggest mistakes we see from self-managed homes is in the marketing of the home; specifically their discipline to find the right renter.

Typically, it takes multiple showings to find the right tenant for your rental and you have to be consistent in showing it to make sure the law of averages works in your favor.

You may get lucky and find the right tenant on showing one, but frequently it takes 7-10 showings.

Are you willing to drive to the property and show 10, 15, 20 times until you find the right tenant for your home? If you are, then you will save time and money on the backend.

2. Application underwriting experience

Professional managers aren’t perfect, but they are consistently better than self-managed people about picking a tenant. I’ve seen many people make the poor decision of choosing a tenant with their heart and not their head.

Bad tenants are good storytellers. Can you see someone telling you a story and you believing it and letting them move into your home?

3. You make better decisions

Much like #2 above, the separation between an owner of a home and their tenant can be a healthy thing. Situations involving your home and where a tenant lives frequently become emotionally charged.

You need a “buffer” for that can allow you to make a decision that doesn’t involve emotion.

Emotion clouds good judgment and a professional manager can help you maintain that clarity. Do you think you can remain level headed when dealing with a tenant who is not?

4. Landlord Tenant Law

Whether you are ignorant to it or not, the Uniform Residential Landlord and Tenant Act of Alabama applies to you. If you own a house in one of our other cities, the appropriate state law applies to you.

If you aren’t in compliance with it and end up in court, judges don’t feel sorry for you because of your ignorance.

They give no passes and you will pay dearly for it. If you are not willing to read the whole law and know that you can consistently comply with it, you may need a professional manager.

Repairman checking outside air conditioning unit for voltage.

5. Availability for maintenance emergencies

Being a landlord means being knee deep in Murphy’s Law. Yes, I’ve had the a/c break on July 4th and the stove break on Thanksgiving.

The biggest reason tenants leave is a landlord’s unwillingness to get repairs handled quickly and that means on holidays as well.

Are you willing to answer the phone on Christmas day?

6. Preferred contractor pricing

Keep in mind that professional managers are handling dozens of toilets breaking and dozens of broken light fixtures each month.

Because of the amount of business we are able to provide contractors, we frequently received discounted or preferred pricing.

Usually, that benefit passes along to you. Do you see the benefit of discounted pricing on work done to your home?

7. Collections and evictions

An eviction notice taped to a door.

What do you do if the worst happens? Even great tenants lose their job or their car breaks down and they need to use the money typically allotted to pay you for other expenses.

Do you understand what it takes to collect that money and when it is time to evict a tenant?

Property Manager Scope of Services

Now that we’ve looked at the questions you should ask yourself when deciding whether to choose a professional manager or not, let’s take a look at what a manager does and outline their scope of services.

These typically fall into two categories . . . marketing and management.

1. Marketing

When marketing the home, a professional manager should oversee and be responsible for the whole “leasing pipeline”. That means they should oversee the marketing, showing, applications, lease signing and move in of your tenant.

Your professional manager should provide you at a minimum the following to rent your home:

  • Sign in the yard.
  • Professional manager’s website posting.
  • Posting to 3rd party websites such as Zillow and Trulia.
  • Some sort of system for handling the traffic generated – whether that be a leasing agent answering the phone or a system for answering all the questions people have asked.
  • Showing – recently this piece has changed a lot for a lot of professional managers. Whether a professional manager has a live leasing agent showing up at every home or provides some sort of technology, they need to have something consistent setup for people to view your home.

Family moving into new house

  • Applications – the next step in the pipeline is very important. Your professional manager should supply a way or multiple ways for a prospective tenant to apply for the home. Online application or paper application or both, you want it to be EASY for prospective tenants to apply and they should provide that.
  • Lease signing – a professional manager should provide a lease that complies with the Landlord and Tenant law mentioned above. The lease must comply or will be thrown out in court. A professional manager’s lease will not only comply but probably has already stood up in court.
  • Move in of the Tenant – this is an often overlooked item. Frequently tenants move in and there are problems. The highest concentration of work orders happens upon tenant move in. A professional manager’s thorough oversight of the move in should keep these work orders to a minimum and make sure the tenant’s experience with the company gets off on the right foot.

2. Managing

Your work is just beginning once your tenant moves in your home. A professional manager ought to provide the following services to you. . . A way for your tenant to submit a problem with the house that needs to be fixed, a solution for getting the work completed on the house after it is called in, and a consistent way to collect and account for the rent.

  • Submitting work – It needs to be easy for a tenant to submit a work order. I know that is scary to hear, but most tenants don’t abuse this. It is very important for them to be able to report problems easily. Ease-ability is what keeps them around longer.
  • Getting the work done – a professional manager ought to have tons of options when getting the work done to your home. A laundry list of vendors is a hallmark of a professional manager. Tenants say “speed” is their most important need when something isn’t working right with the home as it relates to getting it fixed and their happiness.
  • Collecting and accounting for rent – There ought to be transparency in the collection process and detailed accounting. You should be able to trust a professional manager and one of the ways to see this is through the monthly statements they provide. They should also have a system in place to collect the rent should the tenant stop paying for any reason. Lastly, they should send the money to you timely..

Lastly, I want to tackle a statement(s) that frequently comes up from owners.

It’s the statement, “I feel like you are nickel and diming me.” Or, “That’s what I thought I was paying you for!”

I think there is a common misconception that leads to this misunderstanding with our Clients and I think it is appropriate to address it.

The misconception is “property managers are real estate agents and thus their services should include everything that has to do with my house.”

I think it is important to understand that we are in two distinctly different businesses and receive payment differently. A real estate agent who is selling your home is paid a huge commission when that home sells. There really isn’t a scope of services for someone selling your home other than, “Do everything you can to sell my home.”

That may mean showing up at the house multiple times, sweeping off the front porch, etc. For property managers, we get paid a leasing fee and a small fee every month to provide a limited scope of services – essentially trading time for money.

If we go outside of that scope of services (spend time) and don’t charge for it, then we lose money . . . which wouldn’t keep us in business very long. Therefore, we are happy to “go outside” the scope and spend the time, but we need to charge our Client for doing so.

When Clients ask us this question, it starts like this, “Can you just run by the house and . . . ” While this request often sounds like “management related activities”, property managers can’t afford to provide these a la carte items in their basic scope of services. These along with the numerous other services outlined earlier will keep the property management company from being profitable.

The sad thing is we want to be helpful and we want to provide you a good service. The reality of it is that we have to remain in business to be able to continue to provide you the basic services you and so many others desire.

When you are hiring a professional manager you need to keep two things in mind, TRUST and COMMUNICATION.


This is what you want when you hire a manager. We highly suggest talking to many and finding the one who you have confidence that you will trust them and they will communicate with you.

If they don’t, then move along.

Ready to speak with our sales team?

Start the conversation!
How did you hear about us?(Required)