Rental Self Management Vs. Hiring a Property Management Company
Hi, this is Tanya with Envy Property Management. In today’s video, we will be going over the top 8 questions to consider when deciding if you should self manage your rental property or hire a property management company to do it for you.
The basis of being a landlord comes with many legal, financial, and ethical obligations. As an investment property owner myself, at the end of the day, time is money and I have to ask myself, how do I want to spend my time?
When it comes to managing a rental, there are 2 options to choose from. #1- you can manage the property yourself, or #2- you can hire a professional property manager to do it for you.
So for option #1, manage the property yourself, you have to ask yourself the question…Why would I do it myself? Most of the time, the answer to this question is to save money. But if time is money and you also consider the hard costs along the way, then you have to seriously ask yourself….in the long run, am I really saving any money?
So today, we are going to mull over this age-old question…Should I self manage or should I hire a professional? As an investor and a property manager, I like to encourage those I speak with who are contemplating self-managing vs hiring a professional to answer 8 simple questions.
#1 – Do I have the Skills Required to List the Property?
These skills include being internet savvy, the ability to take high-quality photographs of your property and the various amenities, being able to write an effective advertising post, and knowing what websites will get you the most prospective tenant leads. Then after all this, do you have the ability to respond to these leads quickly? Being slow to respond could lose you a highly qualified tenant, they’ll simple move on to the next property if you don’t respond promptly.
#2 – Do I Live Near the Property?
It’s important to live somewhat close to the property you plan on self-managing. Think about the time you will spend showing the property, responding to maintenance requests, and doing inspections. If you don’t live near the property, you’re only adding more time to managing your investment, and again we have to remember time is money.
#3 – Am I available to be on call 24/7/365 to respond to tenant maintenance requests, complaints, and emergencies?
Tenants must have a clear point of contact to go to when an emergency, complaint, or maintenance request comes up. Do you have a backup plan if you are going to be going out of town for someone to take care of your property and your tenants?
#4 – Do I Have a List of Qualified Vendors For Repairs?
When allowing someone inside your investment property to handle repairs, they must be licensed, insured, and trustworthy. They will be interacting with your tenants and you’ll need to have someone you trust to be professional and courteous.
#5 – Am I Level Headed?
Can I remain calm and reasonable when conflict comes up and resolution is required? Tenants will sometimes be angry about certain things that you may not necessarily agree with. Remaining calm and keeping the circumstance neutral is a skill landlords must acquire.
#6 – Will I Be Firm With the Tenant When Necessary?
You have to ask yourself when a tenant is pushy or wants to drive their own agenda, will I be able to stand firm and stick to the rules I have set for myself on managing my property effectively, or will you be a bit of a pushover?
#7 – Do I Have the Required Bookkeeping Skills?
Managing a rental property comes with A LOT of bookkeeping. Are you organized and do you have the skills required to keep detailed and accurate income expense records related to the rental property? If you were audited, do you have the organizational skills and financial records pertaining to your tax return to easily provide to the auditor?
#8 – Do I Have the Resources Available to Stay Up to Date With the Laws?
Ordinances and laws surrounding tenants and landlords are always changing. Do you have the resources available to stay up to date with any changes on the community, city, state, and federal tenant/landlord laws and ordinances? And am I willing to take the time to keep myself educated on these laws and ordinances?
If you answered no to any of these questions, or maybe you aren’t quite sure, it’s completely ok to take the time to get to where you need to be as a landlord. But if you aren’t quite confident to take on all these responsibilities yourself, then perhaps you should consider hiring a professional property management company for your investment.
Property management companies, like Envy Property Management, have skilled professionals who are experienced in handling all these nuances that come with managing a rental property effectively.
So, at the end of the day….if time is money, you have to add up the time you will spend on average in managing your rental property correctly. As a team at Envy Property Management, we have the professional processes and procedures in place to manage your property in a streamlined and efficient manner. We estimate on average, a DIY landlord will spend at least 30-40% more time managing their own property. This is due several reasons including not having access to various software platforms, processes, and procedures that professional management companies have access to. If you are an individual self-managing landlord and you do have the extra time to spend on managing your rental property effectively, that’s great. However, there are all these additional factors based on some of these questions. Again, if time is money, then think about the time spent to market the property, time spent to show the property, time spent screening applicants, time spent to lease the property, time to write a lease agreement, time to get the property rent ready, time spent to move the tenant into the property, and time to keep up on the maintenance of the property. Then there are the financial costs, maybe you need to buy a For Rent sign or even pay to market on any online sites. All of this is time and money spent long before you ever collect any money. There is a delay in time on any of this moving towards getting a renter in the home, these are hard dollar costs to the landlord that are coming out of pocket and not coming in as cash flow. Time lost without rent could rack up to thousands of dollars of hard costs or out of pocket expenses.
Now, let’s talk real quick about compliance with both financial and tenant-landlord laws. If the IRS did an audit on you, it’s definitely going to cost you some time but it could also cost you financially. Or, if you’re not up to date on the current laws, particularly in the times of COVID-19 with evictions and other factors, this also takes your time, and one small slip up could cost you thousands of dollars.
Being a landlord is so much more than just collecting a rent check every month, theres tenant/landlord Laws, fair housing, eviction procedures, security deposits. There’s a lot to consider and to stay on top of.
If you see the value in the statement: “Time is Money” – You may want to take some time to explore what a professional property management company can do for you.
Thanks for watching today’s video, we hope you gained some useful information on self managing vs hiring a property management company.
My name is Tanya with Envy Property Management, make sure you subscribe to receive more valuable information about your investment properties. If you have any questions about property management or what we can do to help you increase your return on investment, please call us at 801-337-4337, or visit our website at envypm.com.