Is Hiring a Property Management Company Worth It? Pros, Cons & Real Numbers

Owning rental property can be a powerful way to build long-term wealth, generate passive income, and diversify your investment portfolio. But while the rewards can be substantial, managing real estate isn’t always easy—especially if you're juggling a full-time job or multiple properties. 

From screening tenants and collecting rent to handling late-night maintenance calls, being a landlord often demands far more time and energy than new investors expect.

That’s where property management companies come in. These firms handle the day-to-day tasks of managing a rental, offering convenience and expertise in exchange for a monthly fee. But is that fee worth it?

In this guide, we’ll explore what property managers actually do, weigh the pros and cons of hiring one, and help you decide whether it makes sense for your specific situation.

What Does a Property Management Company Do?

At its core, a property management company acts as the middleman between landlords and tenants. Their job is to ensure that your rental property operates smoothly, remains occupied with qualified tenants, and generates consistent income with minimal hassle for you. Here are the primary services most property management companies provide:

Tenant Screening and Placement

A good property manager conducts thorough background checks to identify reliable tenants. This typically includes credit reports, rental history, income verification, and criminal background checks.

Rent Collection and Enforcement

They handle monthly rent collection, enforce lease terms, and follow up on late payments or bounced checks. Many also offer online portals for tenants to make payments easily.

Maintenance and Repairs

From leaky faucets to emergency plumbing issues, property managers coordinate all necessary maintenance and repairs. They often have a network of trusted contractors, which can result in quicker service and lower costs.

Property Inspections

Regular inspections help catch issues early—whether it’s unauthorized pets, property damage, or general wear and tear. Managers often conduct move-in, move-out, and periodic inspections.

Legal Compliance and Evictions

Navigating landlord-tenant laws can be tricky. Property managers help ensure your lease agreements are legally sound and assist with eviction processes if needed, following all applicable state and local laws.

Bookkeeping and Financial Reporting

They track income and expenses, provide monthly financial statements, and prepare year-end tax documentation. This helps landlords stay organized and tax-ready.

In short, a property management company takes on the responsibilities you would otherwise handle yourself—freeing you up to focus on other investments, your career, or simply enjoying life.

Pros of Hiring a Property Management Company

Hiring a property management company can transform your rental property from a hands-on side hustle into a more passive investment. While it comes at a cost, the value added often justifies the expense—especially for landlords with busy schedules or expanding portfolios. Here are the key benefits:

Time Freedom

One of the biggest perks is getting your time back. A property manager handles the calls, paperwork, and emergencies so you don’t have to. This is especially valuable for landlords managing multiple units or those who want to invest passively.

Professional Expertise

Experienced managers know the ins and outs of local rental laws, fair housing regulations, market rates, and tenant expectations. Their knowledge helps minimize legal risk and maximize profitability.

High-Quality Tenant Screening

Property managers use proven screening systems to find reliable tenants—those who pay rent on time, respect the property, and stay long-term. This reduces turnover, evictions, and costly vacancies.

Efficient Maintenance and Repairs

When issues arise, a property manager already has trusted contractors on speed dial. This means faster repairs, competitive pricing, and less stress for the property owner.

Scalability

Managing one property might be feasible solo, but handling five or more can quickly become overwhelming. Property management companies allow investors to grow their portfolios without stretching themselves thin.

Tenant Relationship Buffer

Having a third party manage tenant communication creates a professional boundary. This can reduce conflict, enforce lease terms more effectively, and make uncomfortable conversations (like rent increases or eviction notices) easier.

Cons of Hiring a Property Management Company

While there are clear advantages to outsourcing your rental property operations, it’s not the right move for everyone. Here are some of the potential drawbacks to consider before handing over the keys:

Cost

The most obvious downside is the fee. Most property management companies charge between 8% and 12% of the monthly rent, plus additional fees for leasing, maintenance coordination, or evictions. Over time, this can significantly eat into your cash flow—especially on lower-margin properties.

Less Control

When you hire a property manager, you give up some control over how your property is run. You won’t be selecting tenants personally, overseeing repairs, or approving every decision. For hands-on landlords, this lack of involvement can be frustrating.

Inconsistent Quality

Not all property managers are created equal. A poor or inattentive manager can cost you good tenants, delay maintenance, or mismanage funds. That’s why due diligence is critical when selecting a company.

Communication Gaps

Because you’re no longer the main point of contact, updates can be slower. Some landlords find themselves chasing down their manager for answers or reports—especially if the company is managing dozens of properties at once.

Hidden Fees or Upselling

Some companies advertise low base fees but charge extra for routine tasks like tenant placement, annual inspections, or maintenance calls. It’s essential to read the fine print to avoid surprise charges.

When weighing the pros and cons, remember that the decision depends largely on your financial goals, time availability, and tolerance for hands-on work.

When Hiring a Property Manager Makes Sense

Not every landlord needs a property manager—but for many, it can be a game-changer. Here are some situations where outsourcing property management is not only worth it, but often the smarter move:

You Own Multiple Properties or Units

Managing one rental might be manageable. But juggling five or ten units across different locations? That’s a full-time job. A property management company can scale with your portfolio, saving you from burnout.

Your Rentals Are Out of State or Far Away

Long-distance landlords benefit significantly from local managers who can respond quickly to issues, coordinate repairs, and handle showings without you needing to hop on a plane.

You Have a Full-Time Job or Other Commitments

If your rental income is a side hustle and not your main focus, the time and energy saved by hiring a manager may outweigh the cost—especially if it allows you to focus on higher-value activities.

You're New to Real Estate Investing

First-time landlords can quickly get overwhelmed by everything from screening tenants to navigating legal requirements. A property manager can serve as a helpful guide, reducing costly mistakes while you learn the ropes.

You Struggle with Tenant Issues or Maintenance

If you’ve dealt with difficult tenants, frequent repairs, or late-night emergencies, handing those headaches off to a professional might be well worth the monthly fee.

You’re Focused on Passive Income, Not a Second Job

For investors looking to generate income without trading time for money, a property manager turns real estate into a more truly passive investment—especially when paired with a long-term buy-and-hold strategy.

When You Might Want to Self-Manage

Hiring a property management company isn’t always the best—or most profitable—choice. For some landlords, especially those just getting started or working with only one or two properties, self-managing may make more sense. Here’s when it might be better to go it alone:

You Own Just One or Two Local Properties

If your rentals are nearby and easy to access, managing them yourself can be relatively straightforward—especially if they attract good tenants and require minimal upkeep.

You Want to Maximize Cash Flow

Saving 8–12% in management fees each month can significantly boost your rental income. For properties with tight margins, every dollar counts—and self-managing can mean the difference between positive and negative cash flow.

You’re Hands-On and Enjoy the Work

Some landlords genuinely enjoy being involved—meeting tenants, handling repairs, and overseeing every detail. If that sounds like you, managing your own property might be more rewarding than outsourcing it.

You're Just Starting Out and Want to Learn

Managing a rental property yourself gives you firsthand experience with the ins and outs of real estate investing. It’s a great way to build knowledge, establish systems, and understand what to look for if you eventually hire a manager down the road.

Your Property Requires Minimal Attention

If your tenant is long-term, the property is newer or recently renovated, and you rarely deal with issues, self-management might be a low-effort way to save money without sacrificing peace of mind.

How to Choose the Right Property Management Company

Not all property management companies deliver the same level of service—and choosing the wrong one can cost you money, tenants, and peace of mind. If you decide to hire a professional, take the time to vet your options carefully. Here’s what to look for:

Local Market Experience

Choose a company that knows your area well. Local expertise means they understand neighborhood rental rates, tenant expectations, and applicable local and state laws.

Reputation and Reviews

Check Google, Yelp, Better Business Bureau, and local landlord forums for feedback. Consistently high ratings (from both tenants and property owners) are a good sign. Don’t hesitate to ask for references.

Transparent Fee Structure

Make sure you understand exactly what you’re paying for. Clarify:

• Monthly management fee
• Leasing or tenant placement fee
• Maintenance markups or coordination fees
• Eviction or legal processing fees Watch out for hidden costs buried in the fine print.

Services Offered

Not all companies offer the same services. Some may not handle evictions or 24/7 emergency maintenance. Ensure the company covers everything you want to delegate.

Communication Style

Ask how often you’ll receive updates and how issues are reported. Do they offer an online owner portal? Will you get monthly statements? Clear, timely communication is essential to a successful partnership.

Tenant Screening Process

Find out how they vet tenants—credit reports, income verification, background checks, rental history. Strong screening reduces your risk of late payments or evictions.

Contract Terms and Exit Clause

Before signing, review the management agreement closely. Is there a long-term commitment? What happens if you want to cancel? A flexible exit clause is a must in case things don’t work out.

Cost-Benefit Analysis Example

To decide if a property management company is worth the cost, it helps to run a simple cost-benefit analysis. Let’s look at a hypothetical example comparing self-management versus hiring a property manager.

Scenario: Single-Family Rental Property

• Monthly Rent: $2,000
• Management Fee (10%): $200/month
• Additional Fees (averaged): $50/month (tenant placement, maintenance coordination, etc.)
• Total Monthly PM Cost: $250
• Annual Cost: $3,000

Now consider what that $3,000 per year gets you:

• No tenant communication
• No handling maintenance requests or late-night calls
• Professional screening, rent collection, legal compliance
• Monthly statements and year-end tax reports
• More free time (time you could use to grow your portfolio, focus on your career, or just enjoy life)

Self-Management Comparison

• Annual Savings: $3,000
• Time Required: 5–15 hours/month depending on tenant and property condition
• Risk Exposure: Higher if you’re inexperienced with tenant law or screening
• Responsibility: You’re on call 24/7, responsible for leasing, repairs, legal compliance, and more

Bottom Line

If you value your time at more than $250/month—or want to keep your real estate income as passive as possible—the cost of a property manager may be well worth it.

On the other hand, if you’re starting out, have the time, and want to learn, self-managing may be the right move for now.

Hiring a Property Manager: Is It Worth It?

At the end of the day, hiring a property management company comes down to one question: What is your time and peace of mind worth?

If you're managing just one or two local properties and enjoy being hands-on, self-managing might make sense—especially if you’re trying to maximize cash flow or learn the ropes. 

But if you’re juggling multiple units, live far from your rental, or simply want a more passive income stream, bringing in a professional property manager can be a smart, strategic decision.

Yes, there’s a cost. But for many landlords, that cost is an investment in reduced stress, better tenants, faster maintenance, and more time to focus on growing their portfolio or enjoying life.

As with most things in real estate, there’s no one-size-fits-all answer. Do the math, consider your goals, and choose the path that aligns best with your lifestyle and long-term strategy.