You’re thinking of renting out a property you own – either your home while you’re away, or a rental that you’ve recently purchased. But should you manage the property yourself, or hire a professional?
There are pros and cons to both options, and it’s important to weigh them carefully before making a decision. Here’s what you need to know.
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Pros of managing your own rental property
Let’s begin by looking at some of the potential advantages of being a DIY landlord:
1. You’ll have full control over who you rent to: Screening tenants is one of the most important aspects of being a landlord and when you manage your own property, you can be sure that you’re renting to someone who you’re comfortable with.
2. You can save money on management fees: Property management companies typically charge 10-12% of the monthly rent, so if you’re able to manage your own property, you can keep more of the profit for yourself.
3. You’ll have a better understanding of your tenants’ needs: When you’re the one dealing with your tenants directly, you’ll have a better sense of what they need and how you can make their experience renting from you positive.
4. You can be more flexible with rent prices: If you find that you’re regularly having to lower your rental prices in order to attract tenants, being the DIY landlord will allow you to be more flexible with your pricing.
5. You can decorate and make changes to the property as you see fit: As the owner of the property, you’ll have the final say on what changes are made to the unit – meaning you can personalize it to your taste.
6. You won’t have to deal with a middleman: Property management companies can sometimes be difficult to get ahold of, but if you manage your own property, you won’t have to go through anyone else in order to get things done.
7. You can develop a good rapport with your tenants: When you’re the one who is interacting with your tenants on a regular basis, you’ll be able to build a good rapport with them. This can come in handy if there are ever any issues that need to be addressed.
8. You’ll have more control over the rental market: By keeping an eye on your competition and understanding what renters are looking for, you can make sure that your property is always in high demand.
9. You can take advantage of tax deductions: As a landlord, you’re eligible for several different tax deductions – but you can only take advantage of them if you manage your own property.
10. You’ll gain valuable experience: Even if you don’t plan on being a landlord long-term, managing your own rental property can give you valuable experience in the real estate market.
Cons of managing your own rental property
Self-managing a rental property is not for everyone. In fact, it can be a big mistake for some real estate investors. Here are 10 reasons why you should think twice before managing your own rental property:
1. Self-managing takes up a lot of time.
If you’re self-managing your rental property, you’re responsible for all the tasks that come with being a landlord. This includes marketing your rental unit, screening and selecting tenants, collecting rent, responding to maintenance requests, and dealing with difficult tenants.
2. You need to be available 24/7.
When you’re self-managing your rental property, tenants will expect you to be available 24/7 to deal with any problems that may arise. This could include a clogged toilet in the middle of the night or a power outage on a Sunday afternoon.
3. You need to be organized and detail-oriented.
When you’re self-managing your rental property, it’s important to keep track of everything in a detailed and organized manner. This includes keeping track of rent payments, maintenance requests, and contact information for all your tenants.
4. You need to be good at dealing with people.
As a self-managed landlord, you’ll be dealing with tenants on a regular basis. This means you need to be good at communicating with people, handling difficult situations, and mediating conflicts.
5. You need to be good at DIY projects.
When you’re self-managing your rental property, you’ll be responsible for all the maintenance and repairs that need to be done. This means you need to be handy and able to do DIY projects, or be prepared to hire someone to do them for you.
6. You need to have a lot of patience.
Dealing with tenants can be frustrating, especially if you have to deal with difficult tenants or those who don’t pay their rent on time. If you’re not a patient person, self-managing your rental property is probably not the right choice for you.
7. You need to be prepared to deal with legal issues.
There are a lot of laws and regulations that landlords need to comply with, and if you’re self-managing your rental property, you’ll need to be up-to-date on all of them. This includes Fair Housing laws, security deposit laws, and landlord-tenant laws.
8. You need to be insured.
As a landlord, you’re responsible for any damage that occurs to your rental property, regardless of whether it’s caused by you or your tenants. This means you need to have insurance to protect yourself from lawsuits or financial losses.
9. You need to be prepared to deal with difficult situations.
Self-managing your rental property means you’ll need to deal with difficult situations, such as evictions, tenant complaints, and property damage. If you’re not prepared to deal with difficult situations, self-managing your rental property is probably not the right choice for you.
10. You need to be prepared to invest a lot of time and effort.
Self-managing your rental property is a big commitment, and it’s not something you can do half-heartedly. If you’re not prepared to invest a lot of time and effort, self-managing your rental property is probably not the right choice for you.
If you’re considering self-managing your rental property, make sure you’re prepared for all the challenges that come with it. It’s not an easy job, but it can be rewarding if you’re up for the challenge.
Should you hire a professional property manager?
When you’re a landlord, there are a lot of different things you have to take into account. One of the biggest decisions you’ll make is whether or not to hire a professional property manager.
There are several things you should consider when making this decision. First, think about how much time you have to devote to your rental property. If you don’t have a lot of time, then hiring a professional manager can be a big help. They’ll take care of all the day-to-day tasks, like finding tenants and collecting rent.
Another thing to think about is how much experience you have with being a landlord. If this is your first time renting out a property, it can be helpful to have someone who knows the ins and outs of property management. They can help you avoid any potential problems.
Finally, think about your budget. Hiring a professional manager will cost you money, but it can also save you money in the long run. They can help you avoid costly repairs and legal problems.
Overall, there are several benefits to hiring a professional property manager. If you’re looking for someone to take care of your rental property, they can be a big help. They have the experience and knowledge to make sure your property is well-maintained and runs smoothly.
Ultimately, whether or not self-managing a rental property is right for you depends on your individual circumstances. If you’re organized and good at communicating with tenants, then self-management could work well for you. However, if you’re not sure that you can handle the added responsibility, it may be better to hire a professional property manager.
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