I live in a townhome with no equity. To me there is no reason to sell as I will have to pay the real estate agent the sellers commission and bring money to the table to unload. So I am going to rent this out and buy a 2nd home.

Question is if a property management company is worth it. My biggest fear is going months without a tenant; which is the last thing I want. I think a months rent would cover a years worth of property mangement fees.

I like that they have the background to deal with deadbeats. I think it is worth it breaking even or maybe losing $100 a month going with a property management company for two years or so until I determine if it is worth it to keep their services.

In my experience on one hand it was good but on the other hand it was not. The management company had no problems keeping it rented and the house was never empty only for move out and cleaning.

The bad was repairs made were not good, leak in the roof, rotting ext. door frame, and numerous other things were not brought to our attention until we decided to sell the house and the realtor sent us pics. It was bad. We rented it out for four years and I left it in almost new condition.

After emails and going up the chain of command the management company agreed to fix everything and add some things but it was a pain and not worth it to me.

At the time we were going to sell but the area took such a big hit of forclosures it effectived our selling price we would be in the hole about 20 grand so renting to was the only option and we were moving 800 miles away.

If you can sell it at a break even point or higher than sell it.

it wouldnt be breakeven. it would be bring cash to the table.

we would end up losing $70 a month - which would be less when taxes are taken into account. this house was in shit condition when my now wife bought it and i have spend the last 6 years updating, fixing, and what not. so conditionwise it is not great but it rentable. no leaks, no broken appliences, carpet is not tore up, etc. i want the security that if i get a deadbeat they have the resources to evict and re-rent.

Tenant search yourself 1st .... you just may locate a rock solid renter for a 1-2yr lease then you can forego the expense of the PM and save $$$

The only negative with you being the landlord is you will sued instead of the property management company. In texas it happens a lot and the landlord almost always loses. One case I heard was a realtor rented  a home with a frigerator and it went out. The realtor had a repairman out there within the hour but the time it took the repairman to get the part and fix the frigerator 24 hrs had past and the tenant claimed all the food in the fridge had to be replaced. The tenant won 1,200.

Other people have told me the same thing to hire a management company and the law suits are their problem.

First off.. lawyers sue everybody.

Id be pretty skeptical of who you heard that from. Ive had tenants counterclaim that several times in tx and ks and the judge denied that without batting an eye. They said it was absurb and the tenant wasnt entitled to it unless it happened several times in a row.

Now thats an easy problem to fix. Landlords seldom supply fridges anymore in my area. I dont. You'll only get a stove from me and you'll like it.

Op, property management can go both ways, much like being a landlord. If you arent cut out to be a landlord you will likely be taken advantage of by the property manager as well and lose money.

If someone slips and gets hurt, you're still going to be sued. The manager might take a share of the blame but i wouldnt count on that. Ive never had my manager sued but ive been sued many time.

The only way to really make money with a management company is treat them like what they are, an expense. They arent humans, they dont have families. They are an expense you need to keep in check.

There are some good ones out there im sure but most are content finding reasons to send one of their guys to bill out hours for any little thing or getting kickbacks from contractors on larger repairs.

I have half of my rentals with a manager and the rest are going january 1st. Im just too short on time to do it.

I keep my management fee cut down to 11 to 13 percent. It can easily get up to 17, even 25 percent of rent if you dont watch it.

I heard similar stories from multiple people. This was in the Houston and surrounding areas.

Every situation and location are different so don't rule anything out when your dealing with property and tenants.

Im not saying its impossible but very unlikely and definitely not the norm.

If it was the norm, no landlord would provide a fridge. Most already dont bc of the extra expense.

the agency I am looking to use charges 9%/mo, then 50% of the first month for filling it.

Thats pretty standard. If you turn over a tenant every 12 to 18 months that half of a month is 3 to 4.5 percent of rents. So figure you're at 14 percent before any repairs. You're on the lower end of the scale nationally, with that rate.

Also, keep in mind if you have a small problem like a leaky sink. Most managers have their own labor guys and will charge something for that. 40 or 45 an hour perhaps. That is one of the costs you have to keep in line also.

It can be an okay deal depending on your market. Single family units can be tough though.

Use caution when using Property Mgmt. Get references, look at some financial break-downs of some properties etc. I'm assisting an older lady that I know that just found out her property mgt company was taking her for hundreds of dollars a month for years. She cut them off and now I'm her maintenance guy and she is her own property mgmt.

The rent is $625/mo for her home, property mgmt. takes 10% plus maintenance. She was getting 5-10% of the rent each month, company said her house was maintenance instensive and had a LOT of maintenance calls and that was eating her rent up. She was paying taxes and insurance out of pocket. She finally spoke with the tenants that have been there for 9 months. They only made 1 maintenance call and it took months for the maintenance guy to even come address the issue. The homeowner asked for documentation on all of the supposed "maintenance calls" and she was told to go pound sand. She isn't the type to sue them and they know it; they were taking advantage of her.

BE CAREFUL, Be VIGILANT of the property, question everything...