Use a management company or not?

I'm thinking about renting out my house because I don't want to be in it anymore but the market here is too bad to sell. Is it better to manage the rental myself or hire a company to do it?

Well, think about whether or not you are cut out to be a landlord. When the toilet clogs at 2am, do you want them to call you? If they fall behind on the rent, can you put up an eviction notice and follow through? Are you going to have to leave work a lot to show the place to prospective renters? Can you maintain a tenant / landlord relationship without becoming best buddies?

We thought about this a lot a few years ago when so many foreclosed properties went up for sale in our old neighborhood. It didn't take us long to figure out that we don't have the heart or stomach to do all that... So I invested in the homes with my money, and he invested in a management company with his. It's worked out really well for us.

Did you not know he has that as a side business? You should talk to a few companies to figure out what their cut would be, get the lay of the land, etc., and then ask him about it to see if you guys can work out something. If he can help you out, I'm sure he will. At any rate, his advice would be free. :-)

Oh yeah, and do what Rob says so you've got a good idea of what you really need to earn from it in order to make it profitable for you.

That all depends on whether the rental company can get more rent, how reliable they are, how much they charge you, who does the maintenance and what other options you have. It has to cost more to hire a manager. Will the difference be made up by their ability to keep it rented and in good shape?

You have to weigh all that against the do-it-yourself option. I think renting it is a better choice than selling if you can maintain a positive cash flow but not just on the payments. I'd estimate the cost of things like a new roof, HVAC system etc. and scale them to the age of what's there now and include it in your calculations. Example: If they're 5 years old and have an expected life of 20 years, add 12K/15 to the calculation if you have to pay for the replacements.

Good to see you're back.