Property management is a challenging task to do. Especially if it is a rental and you must work with tenants and run the rental process. In that case, it becomes a full-time dedicated job. Many property owners and landlords decide to run the rental property business independently, but some don’t have the time, energy, and expertise to do so. Hence, they hire a property management company to take over control.
If you own a rental property and want to start renting it but don’t know whether to manage it yourself or hire a property manager, this article is for you. We’ll outline the advantages and disadvantages of DIY property management and the Done-For-You approach.
DIY Property Management: All the Control is in Your Hands
Let’s start with the self-management type approach first. On the good side, as a property owner and manager you will have the freedom to have full control over how you run the rental businesses. That means you’ll have to schedule regular inspections, take care of maintenance, and choose tenants. Next, you’ll need to make sure the rent is collected in time, and be responsive to tenants’s requests. Finally, you need to ensure that all legal responsibilities are fulfilled and the whole process is streamlined without any obstacles.
This would usually mean that it will be a full-time job for you, where you need to dedicate your working hours to successfully run the business. The biggest benefit is that all the profit you make will go to your account and you’ll get the opportunity to invest and expand your investment portfolio.
On the downside, self-managing a rental property can put a lot of pressure on you since there are so many segments that you’ll need to cover, especially if you have another job. The biggest disadvantage is that you are responsible for everything and if your knowledge and expertise are lacking some parts, you might stumble upon challenges that could even lead to legal misunderstandings, lawsuits, and even injuries (in cases of improper maintenance).
To avoid such obstacles, it is a wise idea to take some courses on how to run a property management business by yourself. Expanding your knowledge will give you the advantage of understanding how things work in the property management world and you will be able to run your business on your own. Of course, there will be issues and problems that sometimes will drain the energy, but, you will learn along the way.
The Done-For-You Approach
When you don’t have the time, knowledge, and expertise to run a rental property business, it is a wise idea to let a property management company take over. This especially applies if you have another job, or you lack the skills and expertise of property management needed to run the business smoothly. The property managers are licensed individuals who make sure your rental units are occupied, the rent is collected on time, the property is maintained well, and the tenants have signed excellent leases, possibly long-term ones. This frees you from worrying about anything related to the business and all you have to think about is the passive monthly income that will come to you.
However, letting everything be taken care of by a property manager means not having any control over how some decisions are made. Since you won’t be present when tenants are screened, or leases are signed, you won’t have the chance to make any decisions on the spot, so you’ll have to put the trust in the property manager’s hands and feel good about it. Of course, the property managers will do everything in their power to follow the agreement between you and them, but still, they’ll be the ones who will have the final word.
If you are someone who wants that passive income and does not care about anything else, then this approach is the right one for you. But, you need to take into consideration that a percentage of the profit will go to the property manager’s account. This is usually from 8% up, depending on many factors that, of course, you’ll both agree to.
Conclusion
Both approaches can work well for a property owner or a landlord - it all depends on the situation you are in. If you have time to fully dedicate to running your own rental business, then, taking some courses to expand your knowledge and develop your skills would be a good idea. If you don’t have the time to do so, hiring a property manager will do the job. They will make sure th whole process is fully streamlined and bring regular money to the account for a percentage of the profits. Whichever approach you choose, just remember, that it is all about tenant satisfaction and how to establish a long-lasting relationship with them.
