If you’re thinking about buying your first duplex, you might think the best way to make it a low maintenance investment is to hire a management company.
After all, they do this for a living, right? They can handle all of those late night phone calls and evictions, while you sit back and collect rent.
However, it’s important to remember that property managers impact your cash flow. And not always in a good way.
In Minneapolis, most duplex managers charge anywhere from $80-100 per unit per month. That’s $1920-2400 a year, on a property that may generate $20-24,000 a year.
After vacancies, taxes, insurance, utilities, repairs and mortgage payments, management fees can often soak up as much as one third of your profit.
What’s more, if you’ve never managed investment property on your own before, it can be difficult to know whether your manager’s accounting of expenses is accurate.
And frankly, most of the time, managing one or two properties isn’t really that time intensive.
Having said that, there are certainly great reasons to hire a property manager as well.
For example, if you live a considerable distance from your duplex, property management makes sense. The same can be said if you have multiple properties, or simply don’t have the time for more hands-on management.
If you’re considering hiring a property manager, you may decide the benefits don’t outweigh the costs.