Most rental property owners and investors forget what their time is worth. Based on Real Property Management research, the average household income for our clients is above $100,000 per year. A large percentage of them have professional, technical, sales or service occupations. With an income at that level, and assuming a work year of 2,000 hours, our clients’ time is worth approximately $50 per hour.
And yet, many property owners readily spend time dealing with tenant issues, getting involved in unexpected maintenance and repair issues, hounding tenants for late rents, and dealing with other property management issues. The value of the time spent can easily exceed what it would cost to have a professional manage a property.
For example, a professional property manager’s fee for a $1,200 per month rental would be approximately $120 per month. If an investor spent just 2.5 hours per month managing their property, their personal time costs more than hiring a pro. (And, a professional manager’s fees are tax deductible, so the gap is even wider than this example.)
At work, would this same investor do tasks at the office which could be done by someone at a lower pay scale? No. They would likely hire someone to do the lessor valued work. Smart business people match the value of work to pay scales. The same principle should be applied to rental properties.
Are you working below your pay grade? Visit our Leasing and Property Management Calculator to determine how much time you spend managing your property and whether you could save money by hiring Real Property Management.