If you own rental units, whether it’s one single family home or a portfolio of apartment complexes, one question you’ll inevitably face: to manage or to outsource. Is it worth the time and effort to manage your rental property? Or is hiring a property management company a better choice? There are distinct advantages to managing a rental property as an owner.
Most people get into rental properties to make money. When using rentals as an investment, minimizing expenses will maximize profit. For owners willing to put the time into self-managing, this can eliminate the expense of property management. Usually a private company will charge you 7-10% of the collected income from the property, in addition to any other fees, such as the first month’s rent for each new tenant. That’s a significant expense that you can save by managing the rental property yourself.
You may not know everything about property management – yet. Managing your rentals is an excellent chance to get to know the ins and outs of management and your specific property. That way, if you do decide to hire a company down the line, you will have a better understanding of the building and the responsibilities of management. Even if you do end up hiring a property manager or team, you will gain valuable experience from doing the job first. This knowledge will make you more informed and better prepared to find the right person for the job.
You have a vested interest in your rentals and care the most about the property. You are the best person to make sure your rental property is kept in tip-top shape. While a property management company may only worry about maintenance when a tenant calls with an issue, you can keep your property in better condition with routine maintenance on appliances, cleaning gutters, check ins with tenants, and regular inspections. Keeping up on maintenance (instead of deferring to maximize profits in the short-term) will save you money in the long run and make it easier to turn the unit over when you need to rent it again, because there won’t be major issues to fix.
As a owner-manager, you will have total control over your rental property. Relying on a property manager to carry out your concerns and plans is not always a sure thing. As we’ve said, you are the one with the biggest interest in the success of your rental unit. Not every property manager can be trusted to find the right contractors and vendors to work on the space, to be honest about vacancies and rents, and to handle your property in a manner you would want. Some owners fall victim to shady property management companies that steal money, don’t properly screen tenants, and other unsavory activities.
When it comes to rental properties, you are the person most vested in your success. Acting as your own property manager can save you from shady property management companies as well as money. If you’re prepared to take on the hassles of management, including emergency calls in the middle of the night, it can be a rewarding learning experience that gives you total control over your rental.
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