There are a lot of good reasons for an owner to hire a property manager, and many of them are well documented. Tenant procuring. Tenant screening. Lease enforcement. Reporting. Maintenance. The list goes on.
But one advantage of having a professional manage a rental is that the property manager knows the rental market. Why is that important? Because when market rents go up sharply (like they are doing right now), a property manager knows how and when to raise rents.
If an owner of one rental unit advertises his/her property for rent on, say Craigslist, then there is a better-than-even chance that the property will be under-valued. The owner won’t be aware of just how strong the market is. A property that could fetch $1,500 goes out on the market for $1,200 or $1,300. That difference pays for the manager’s fee AND adds profit. The owner sees a bump in his/her cash flow AND gets free property management! Not a bad deal.
We are currently raising rents significantly in the Seattle market. Demand is far outstripping supply.
The situation works in reverse when rents drop. A property manager (with the owner’s approval) can offer lower rent to tenants in order to keep them from moving and save on turnover costs.