Rental properties can be an excellent investment opportunity. If you already invested in rental property or you plan to purchase a property and begin your journey as a landlord, you may wonder what comes next. Once your property is ready to go, it's time to figure out all the nuts and bolts of how to manage your property.
There are two main options to consider for managing your rental property — managing your own property vs. hiring a property manager. Choosing one of these options determines how the daily operations of your rental properties are run. What do these daily operations include? Let's take a look at the tasks managing a rental property entails:
With a list that long, deciding who will take care of these responsibilities is an important decision. Self management may save you money, but property management will save you time and effort, ensuring things get taken care of quickly and professionally. Let's look at each of these property management options in greater detail so you can make an informed decision.
What Is Self Management?Self management means that you, the landlord, not only own the property but also take care of the day-to-day operations necessary to make things go smoothly and keep the property up to date. Your tenants will look to you alone as their point person for routine things like paying rent and for addressing issues that come up.
There are a few potential advantages to self management if you have the time and expertise necessary to do it well, but there are many disadvantages, too. Let's take a look at the pros and cons of self management.
Pros of Self ManagementProperty management means someone else runs a property you own for you, handling the day-to-day tasks big and small that keep your investment prospering. If you go the property management route, you pass on that long list of duties above for another party to handle. You don't necessarily have to leave yourself out of the equation entirely if you want to have some control over decisions, but for the most part, you can step back and let the property management group you partner with handle everything from advertising a property to collecting rent to handling any issues that come up.
There are some potential advantages and disadvantages to choosing to use a property management group rather than self manage your property. Let's look at the pros and cons of property managers.
Pros of Property ManagementYou wonder what the difference between self management and property management will look like for your tenants. After all, you want your tenants to have a great experience renting from you. If they do, they may become long-term renters and may even refer friends to rent from you, as well. Many renters want to know they can contact someone who will respond to them promptly. If they experience a maintenance issue, trying to get ahold of a landlord vs. a property manager who works in an office may prove a lot more difficult. Even if they are able to make contact with you right away, what if you're out of town or are otherwise occupied? Even a minor issue like accidentally locking their keys inside the apartment could become a major issue if you're not there to unlock the door for them.
In addition to being able to contact someone and expect a response right away, renters also care about convenience and efficiency in their property management experience. For example, many people these days prefer to pay their rent online. Property management groups typically have an online payment platform in place to deliver this convenient and efficient service to renters, whereas landlords may not have the same means to accept payments online.
Should I Hire a Property Manager or Do It Myself?In order to decide whether you'd be better off to rent by owner vs. using property management, you should consider the pros and cons for your own situation with relation to your rental properties, career goals and personal priorities. Here are six questions to ask yourself in order to help you determine which option is best for you:
Whatever you decide, don't be afraid to reevaluate after some time and change your plan if it's not working out. Some property owners start out thinking they will be able to handle the management of their properties on their own but later realize the benefits just aren't worth the stress.
How Do I Choose a Good Property Manager?If you decide to go with a property manager, then you want to make sure you choose a good one in order to reap all the potential benefits. Not all property management groups are created equal. Here are some questions you'll want to find the answers to before choosing which management group to partner with:
You don't want just anyone managing your properties. Remember that your reputation as a landlord will be tied, at least in part, to the performance of your property manager. You want an experienced company that reflects your own values, a place that will provide pleasant interactions with your tenants and allow you to take more of a hands-off approach with your property. Partner With Asset Property Management