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Buying a piece of income property, whether it is for residential or commercial use is a great investment. What better of a way to gain a valuable source of residual income than investing in income produceing real estate? No matter what type of property you purchase, if you intend for it to be used for real estate purposes or for commercial purposes somebody has got to manage things, both in regards to establishing contact with tenants and serving as a midpoint between the tenants and the owner.

In addition, somebody has got to be there to manage the property from a financial perspective, collecting and following up on invoices and paying bills, among other things. Who should the check be made out to, and who should the tenant contact if they should have an issue to discuss? Just because you purchased the property does not make you a counselor or consultant, and it definitely does not imply that you have any customer service skills.

This is what a property manager for. They can cover just about all of these things and more, but just like the saying goes 'nothing in life is free.' Property managers do charge for their services and you don't always get what you pay for (or thought you were paying for) in any case. To give you the best tool possible to avoid getting into an issue with a property manager that you are unable to handle, here are some of the most common mistakes that people in your position make, spelled out in plain English so that you know to avoid them.

* Over Paying

Paying too much is the top mistake that first time property manager hirers are guilty of making. Property managers do a lot for your company, and it is important to pay them but nobody said you had to make them rich. Ten percent of the monthly rent paid is a great place to start as far as recurring payments, as well as a set percentage of the first month's rent of a new lease or a small percentage of the amount of the total leasing amount over the entire span of their time is also okay.

* Hiring a Bozo

Okay, of course nobody is going to necessarily hire Bozo the clown, but if you are going to spend the money to hire a property manager make sure you hire someone who is qualified and knows what they are doing. Of course not every property manager is going to be degreed, but having the right experience in lieu of a degree is an essential qualifier. It may in some cases be okay to give a newbie a chance, but make sure that you are able to spend the time or hire somebody to spend the time to properly train them.

* Hiring One-Sided Property Managers

Many owners find it easier to hire companies or individuals who will do the leasing side of things but not the managing side of things as far as tenancy goes. It is easy to hire someone to do this because it is usually for a substantially less fee than those who do both but don't be tempted. Those managers who do not have to deal with tenants will be a lot less scrupulous when it comes to selecting them. After al, who cares what somebody is like as long as you don't have to live around them?

* Hiring a Manager You Would Detest

If you meet your potential new property manager and you feel like you wouldn't care to deal with them, consider the fact that you might not want to hire them. If you have ever lived near or rented from a property manager that you hated you will understand why, but treat your potential renters as you would yourself. This is also bad for business, so if you want good clientele make sure that you only arm yourself with the best people to deal with them.

* Using Standard Contracts

Make sure that when you hire your property manager, your contract reflects the times. This also goes for your leases. If you buy the pack of contracts or leases from Staples where you simply fill in the blanks, you are leaving yourself open for a lot of holes. Have your contracts done specifically for your situation.

* Signing a Long Lease/Contract

The worst thing you can do is sign a super-long contract with a property manager or managing company; that is, unless you have worked with them for years. If a company provides good service and is consistent and worth the money that will keep you in the game, not some silly contract that can be forfeited or fought in the case of poor management. This is why it is important to have better than a standard contract.

Hiring a property manager can be a real headache and if you are a first timer, that is more than an understatement. That is why it is important to make sure that you do well when you are hiring you property manager, so that you don't have to deal with it again any time soon.

You want to make sure that you get the best deal that you possibly can, but you want to make sure that your property manager will do a good job for you as well, and you do not have to spend a fortune on them to do so no matter what type of property you need managed. Property managers are supposed to help increase your revenue, not draining it by charging outlandish costs and fees.