Hi, my name is Maria and I’m a Client Onboarding Specialist at Richey Property Management. I have been managing properties for over 10 years. I started out renting a basement in a townhouse my husband and I own and I had no experience. I enjoyed interacting with people and helping them find a home, so it all came naturally. Eventually, we acquired a second property and then I worked for a small company, where the main focus was still DIY management and learn-on-the-go skills. After I was hired at Richey, I got a chance to view property management from a new perspective, as we manage close to 700 properties and our rental portfolio is growing every day.
In this post, I will be comparing the pros and cons of self-management vs. hiring a property management company.
Rental properties can be an excellent opportunity for an investor. If you already invested in rental property or you plan to purchase real estate and begin your journey as a landlord, you may wonder what comes next. Once your property is ready to go, it’s time to get organized and start managing your property.
The number one question every investor faces is to decide whether managing your own property vs. hiring a property manager. It is an important decision, as it will determine many factors down the road and how smoothly your overall experience will be. I learned from my own experience that self-managing does require a lot of patience, flexibility, quick starter skills and personal organization.
Here’s what you should expect to do if you consider self-managing a rental property:
- Advertising your property
- Determining rental rates
- Preparing the lease
- Tenant screening
- Collecting rent
- Doing preventative maintenance
- Establish contractor relationships
- Doing repairs
- Addressing complaints
- Resolving issues between tenants
- Checking in with tenants at least once a quarter
- Enforcing the lease
- Evicting a tenant when necessary
- Finding new tenants when vacancies occur
With a list that long, deciding who will take care of these responsibilities is an important decision. Self-management may save you money, but it can add many headaches if you have other responsibilities like family, a job or activities.
Handing the job to professionals, on the other hand, will save you time and effort, ensuring things get taken care of quickly and professionally. When I started working for a property management company, I realized how many great options the service may offer and save you unnecessary stress in the long run.
There are some advantages I’ve learned about managing my own properties:
- Greater Control: Self-management gives you a greater degree of control over daily operations.
- Closer Relationships With Tenants: I had a pleasure of finding and working with great tenants
- Experience: for some it will come naturally, while for others it may be more of a challenge
- Financial Savings
The Cons of Self-Management:
- Time Required: It is time consuming to perform all the tasks listed for each property and it will multiply if you have multiple rentals to take care of.
- Stress: Managing your own properties can be stressful as unforeseen circumstances may arise with tenants, including late-night emergencies, unpaid rent, conflicts between tenants, and legal matters, including eviction.
- Lack of Expertise: There are a lot of moving parts to successfully managing real estate. Not knowing the laws of your state or simply being unaware of potential issues can backfire later on.
- Setting Rent Too High or Too Low: Due diligence and research is crucial to setting the right price for your rental, and also proper descriptions and accurate analysis of comparable market is necessary.
Property Management Company:
When I started working for Richey PM, I realized the ease and comfort our clients have by allowing us to handle the day-to-day tasks big and small that secure their investment. Our clients still have some control over decisions, like choosing a tenant and setting the rent amount, but for the most part, you can step back and let the property management company you partner with handle everything from marketing your property to collecting rent to handling any issues.
Here are some important reasons to choose a property management company over self-management:
- Freedom of Time. You are free to pursue your other endeavors, while letting professionals handle management of your real estate.
- More Effective Work-Life Balance. You will be able to separate work and life more successfully by not driving to properties to do inspections or meet potential tenants for an open house.
- The Expertise of the Professionals: A big advantage you gain with a property manager is all their valuable knowledge gained over years of managing properties. Where you may experience real challenges trying to deal with a problem, and make a decision on a fly, your property manager will likely know the best way to handle it based on past experience.
- Rules and Regulations: Here at Richey PM we’re always following the rental laws, changing laws and we know how to avoid violating Fair Housing laws and any state statutes you must abide by.
- Filling Vacancies Fast: We nearly always find a suitable tenant within 4 weeks or less from the date your property gets listed. It’s our best interest to find qualified candidates, and we advertise the listing across 30 different platforms (including Apartments.com, Hotpads.com etc)
What do my Tenants think?
Of course, when self-managing my properties, I established long lasting relationships with my tenants, who take great care of my homes. However, there have been situations when I needed to be at the property for emergencies and other issues. Tenants definitely seek a sense of security when it comes to being able to contact the landlord and get a prompt response. So, in my observation I realized, self-managing real estate requires part-time dedication and schedule flexibility in order to be a successful landlord. In reality, it’s not always possible as people have lives, careers and/or children to take care of.
Ultimately, it’s your call to decide whether to self-manage your real estate or let professionals handle it for you, and I hope this article was helpful.