Managing your own rental property can be a handful. It involves plenty of work and tasks beyond collecting rent and keeping it clean.
Depending on factors such as their capacity and priorities, some investors hire a property manager to help deal with the day-to-day operations of a rental property. Meanwhile, some owners prefer to be more hands-on by learning to be efficient rental property owners and managers.
As property owners, you must ensure that your property is in good shape and that your renters are satisfied with their stay. Proper management can provide the care your property needs. But do you need a property manager, or can you do it yourself?
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What is a Property Manager?
A property manager acts on the owner’s behalf to preserve the property’s value and helps with tenant screening, rent collection, and maintenance and repair issues. If it is part of the agreement, the property manager can also help market the rental property, resolve tenant concerns and complaints, and pursue evictions.
Real estate property owners and investors typically get a property manager when they cannot manage the properties due to other full-time commitments. However, others prefer to directly manage the property. Either way, there are pros and cons to both property management styles.
Pros of Hiring a Property Manager
1. You Can Rely On Their Expertise and Previous Experience.
An experienced property manager has most likely dealt with everything, from lease breaks to tenant disputes and other cases that may be too overwhelming for a property owner to handle.
Years of practice make property managers adept at managing homes and screening for responsible tenants. In addition, they may have a network of maintenance staff and contractors in their immediate contacts, allowing owners to get a fair quote on electrical, plumbing, and other house labor.
2. You Don’t Have to Be Nearby
Your investment opportunities are often geographically limited if you manage your own properties. A property manager shall enable you to invest in more distant properties, including vacation homes abroad, as they act and decide on your behalf. They are there to help you deal with issues you cannot handle instantly.
3. You Can Focus on Things That Matter to You
Property owners can freely delegate tasks and daily operations to their property managers, including tending to the property, performing maintenance work, and finding reliable professionals to handle the repairs. Delegating these tasks to your property manager gives you time to focus on more personal and essential matters.
Cons of Hiring a Property Manager
1. You Hand Over Control Over Property Operations
Property managers will likely have their own methods of handling and managing the property. Hiring them would mean you are handing them over control and putting complete trust that they do things right. If you prefer to be hands-on with your rental property, consider an alternative to a property manager.
2. Fees Can be Costly
One of the most significant concerns of property owners when hiring a property manager is the cost of their service. Most property management companies charge a leasing fee in addition to a fixed percentage of the rent. Others also charge miscellaneous, maintenance, cancellation, and renewal fees, among many others.
3. Rigorous Hiring Process
There is a challenge to hiring the right property manager. You must review several candidates before finding the one that fits your preference. It will be a rigorous hiring process since you will need a property manager willing to learn and understand your property, so they can care for it as you would.
Pros of DIY Property Management
1. Complete Autonomy Over The Property
Owners who choose to be DIY property managers have complete control over everything on their property, meaning they oversee all operations, tenant selection, and rent collections. There is also full authority over when or how much to spend on advertising, renovation, maintenance, and other matters.
2. More Cost Efficient
DIY property management entails you don’t have to pay anyone to manage your property. You keep all the fees you otherwise would have paid for the outsourced help, which can go up to 10% more in your books and amount to a month’s rent. This money can be invested back into maintenance or renovations.
3. Gain Property Management Experience
Managing your property gives you experience evaluating tenants, working with maintenance staff, and other daily operations. The more you gain, the better you will be at property management and being a landlord overall.
Cons of DIY Property Management
1. Learning Legal Regulations
One obligation that comes with managing your own rental property is learning and dealing with legal rules and regulations. With the help of a lawyer or legal adviser, you must draw up a lease agreement and ensure that your tenancy agreement is formulated per the latest regulatory law and will hold each party accountable.
2. Time-Consuming Work
New DIY property managers will likely get overwhelmed by tenant requests and concerns they need to address. On top of that, you also have to spend time arranging for different contractors to look into structural and maintenance issues. All property management tasks require time, effort, and attention to ensure you do the job correctly.
3. Build A Process From Scratch
As the owner, you must create a comprehensive and practical process for tasks involving daily operations, vetting potential renters, maintenance work, and more. Luckily, resources are available online to guide you in building these processes.
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