Just like the owners of any other business, people with rental properties are always interested in ways to lower expenses. One way they might try to save money is by doing their own property management.
Is doing your own property management a bad idea? Taking care of everything yourself certainly can be a lot of work, but for the right person in the right circumstances, it might be worth it. On the other hand, there’s a lot to be said for letting seasoned professionals do a lot of the “heavy lifting” when it comes to day-to-day management.
So: Do you have what it takes, or are you better off hiring a property manager or management company? We’ve put together a list of questions to ask yourself before you decide.
How Many Rental Units Do You Own?
Obviously, maintaining and managing one rental unit yourself is a lot more realistic than managing hundreds or even a dozen. It’s simple logic that the more properties owned, the more work they will be to take care of.
The tipping point for the number of units where it becomes overwhelming will be different for everyone. Owners must ask themselves how much time and effort they are willing and able to devote to their tenants. Some things to consider that will affect the decision:
- Are they holding down a full-time job in addition to managing the property?
- Do they have children or family obligations that take up a lot of time?
- Is the property in good repair, or is there always a lot to do?
- Do the tenants take good care of the property and do some of the upkeep?
An owner may start with one property and have no trouble keeping up with everything that must be done. Adding a few more units to the real estate portfolio can completely change things. The
property management to-do list
can seem never-ending and out of control. When a landlord reaches that limit, it’s time to get help.
Do You Live Nearby?
When a landlord lives in one half of a duplex and rents out the other, it’s easy to pop next door to take care of a problem or do a repair. The further away the rental property is, the harder and more time consuming this becomes. Beyond a certain distance from the landlord’s home, DIY property management just isn’t practical.
Tenants expect landlords to be responsive to issues and available in the case of an emergency. If they don’t live near enough to the rental property to get there quickly, they will need to find someone else to step in when needed.
People invest in rental real estate all over the country. They often have no intention of shouldering the burden of managing the property themselves. No matter where a property is located, they can hire a management company or individual to take care of tenants’ day-to-day needs.
Do You Have the Time to Advertise and Screen?
Vacant properties don’t bring in any money, but the owner still needs to pay the mortgage. The landlord needs to find someone to move in as quickly as possible.
In addition to cleaning the unit and fixing anything that needs attention when someone moves out, the unit will need to be listed wherever rentals are advertised in the area. This could include social media, websites like Craig’s List, a community bulletin board, or in a local newspaper. Video tours and high-quality photos to show off the property’s best features have become common in many markets. While many of these avenues are inexpensive, they have to be eye-catching to attract potential tenants. It can take some time and talent to get it right.
Even though virtual tools are popular, it’s unusual for someone to sign a lease for an apartment or house without seeing it first. This means landlords have to make themselves available to show the property, possibly to multiple candidates.
Once there are people interested in renting the property, the application and
screening process
begins. Screening potential tenants is critical for finding good tenants and avoiding renting to bad ones. A thorough check includes looking carefully at their financial and criminal backgrounds, as well as checking with former landlords and character references.
Tenant screening is an expense that can’t be avoided. Owners must also take the time to examine the data the background checks provide, making their decisions about which tenants to choose, while not breaking any discrimination or fair housing laws.
Are You Handy?
Property management includes routine maintenance as well as repairs when something breaks. When owners commit to doing their own work on their rental units, they need to be a jack-of-all-trades.
Ongoing upkeep takes the form of many regular tasks:
- Mopping and vacuuming common areas
- Cutting grass and landscaping
- Shoveling snow
- Cleaning and removing trash
- Painting
Repairs and maintenance jobs will have them wearing many different hats:
- Electrician
- HVAC repairman
- Plumber
- Appliance installer
- General handyman
If the property owner does not have the time, physical ability, or skill to do these things alone, he or she will need to hire a reputable person for each job that arises. This is particularly true in the case of an emergency. Landlords should get used to interruptions, as they may get calls at all hours of the day or night. Whether it’s 3 am or during their child’s birthday party, they often must respond right away. A broken window or broken pipe flooding the basement won’t wait until a more convenient time.
Even if nothing is preventing landlords from doing all of these things themselves, they may simply have no desire to do them. Taking on the work of even just one rental unit in addition to one’s own home can take up a lot of time and energy.
The bottom line is that tenants need to be taken care of, so these things must be done no matter what—either by the landlord or a third party.
Are You Prepared to Get Tough?
Unfortunately, renting homes comes with some risk. Landlords may have to cope with tenants who don’t pay their rent on time, damage the property, or cause trouble for the other tenants. These situations can put an owner in the uncomfortable position of having to confront the renters or even call the police or start the eviction process.
When tenants don’t follow the rules, landlords may sometimes have to “be the bad guy” to ensure In order to ensure the condition of the property, the safety of other tenants, and the success of their rental business. Not everyone is cut out for the role of rule-enforcer.
A property manager can relieve this burden from an owner. They can
collect rent and handle raising it
when the owner chooses. If they have an office on-site, they can address problems and rule violations right away. And if it is necessary, they typically have experience in
initiating evictions.
Do you have a head for business?
A lot of time will be spent on accounting and administrative paperwork when doing your own property management. Collecting rent, paying bills, and keeping track of security deposits will be a regular occurrence.
It is necessary to make sure insurance policies are up to date and the building is in compliance with all codes. Landlords must also keep informed about laws and statutes dealing with rental real estate to ensure they are following all local, state, and federal regulations. Failure to do so could mean fines or even criminal charges.
Handing Off the Property Management Duties
Do-it-yourself property management is a lot of work on many different fronts. A landlord must:
- Be willing and able to do the physical work of taking care of the building
- Have the interpersonal skills needed to deal with all types of people
- Know about proper business practices and keep good records.
Rental property owners who lack these skills to do their own property management should think seriously about hiring a property manager or company like Select Leasing & Management. An experienced company like Select can take charge and handle everything we’ve discussed.
Whether you decide to continue taking care of some tasks yourself, or hire someone to handle it all,
start here to learn all about how property management companies work .
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