Managing a rental takes lots of work, much more than many people realize. As the owner of a rental property at some point you might wonder whether you should hire a property manager or take care of your property yourself. The following are the biggest advantages and disadvantages of each option.
Advantages to Hiring a Property Manager
Saves you time and effort.
A property manager handles the day-to-day running of your rental property business, beginning with getting your property rented out so it can earn income for you. Property managers do the dirty work that comes along with finding tenants, including advertising your property, fielding inquiries, showing your property, and combing through every application. Once a tenant is in place, a property manager then handles any issues that might arise from repairs to complaints to emergencies. And speaking of repairs, property managers can save you money since they have connections with many different vendors and get a better price on repair work.
Real estate laws.
There are many laws you need to be aware of when it comes to being a landlord at every stage from selecting tenants to maintaining your property in a particular condition to keep it “up to code.” There are federal, state and local laws you must be familiar with and to top it off these laws change often. Because it is their business, property managers understand and stay abreast of the applicable rental property regulations, and part of their service is to make sure your property remains in compliance every step of the way.
Finding the best tenants.
Property managers know how and where to advertise your property to attract the biggest pool of quality applicants. Experienced property managers have rigorous screening processes developed over years of screening thousands of applications and know what types of applicants make the best tenants. Property managers are invaluable when it comes to finding great tenants.
Your interests are aligned.
Property managers make money when you do so it is in their best interest to find you quality tenants and keep your property performing at its peak. This is one of the most significant advantages of hiring a property manager – they work hard to make you as much money as they can because it benefits them too.
Advantages to Managing Your Property Yourself
Not paying management fees.
Property managers do not work for free so having a property manager will lower your overall profit since you have to pay them a percentage of rental income (on average 7-10%) However, this small fee is worth it to have your property taken care of and performing at its peak.
You might like managing your property yourself.
There are advantages to managing your rental property yourself. For instance, you might think it is fun to interact with new people, showing your property to prospective tenants, answering phone calls, and speaking with tenants whenever an issue arises. You might enjoy being hands-on with your rental – fielding applications yourself and being available for emergencies 24/7. Managing your property yourself is also a great way to learn everything from landlord-tenant laws to how to do home repairs.
Although property managers charge a fee, they are experts at taking care of rental properties so they perform for their owners. Deciding whether or not to manage your property yourself ultimately boils down to how much time you want to spend handling the issues that come along with rental property, how convenient your property is to where you live, and how “hands on” you want to be when it comes to dealing with your tenants. Unless you have lots of time on your hands or are interested in making property management your career, it is usually best to hire a professional.