Owning a property and converting it into a rental will require you to make a lot of decisions. One of these is whether to become a self-managing landlord or hire a property management company. There are pros and cons to each choice. This requires careful thought knowing that the decision will bring its own set of consequences.
On your own, managing your rental means all the income will go straight to your account after deducting your operational expenses. But the daily tasks of taking care of the property and the tenants can also be overwhelming. It can consume a lot of your time and energy. A property management team can lighten your responsibilities for a fixed monthly fee.
This article will evaluate each option allowing you to better understand your alternatives.
Defining Investment Property Management
Rental property management is engaging the services of a third party to handle the rental unit’s needs as well as assisting the renters staying on the property. Rental property owners hire a property management company to manage the day-to-day tasks and attend to the requests and issues of the tenants.
Sudden property vacancies are addressed by the property managers through marketing. Finding a good tenant immediately is one of their responsibilities. Aside from marketing, property managers are also in charge of lease signing, rent collection and scheduling repairs.
The Job of a Property Management Company
Hiring a property management company to handle your rental operations is also considered an investment. In due time, you’ll earn the rewards through maximized earnings that can cover the management fee.
Here are the benefits of hiring a property management company:
- Rent will be collected promptly from the tenants
- Maintenance requests will be addressed and provided a timely response
- Tenants who pay the rent late will be managed
- Vacant units will be advertised and found new renters
- Vital property management records will be stored properly
The Value of Having a Property Manager
As a property investor, you may ask yourself if a property manager is worth the investment. For a lot of property owners, the answer is yes. Some investors want to avoid shouldering the duties of a landlord.
Others know they lack the experience and would rather turn over the responsibility to skilled professionals in the property management industry. Still, the remaining ones want to protect their time and use it to go after more investment opportunities than being tied up with the daily tasks of a landlord.
Property managers increase the value of your rental in several ways such as:
- Offering marketing strategies: Property management professionals have solid marketing experience. It’s easier for them to land high-quality tenants and reduce property vacancies swiftly. This ensures that your income remains consistent.
- Contributing local market know-how: A good property manager will be able to help you set an optimal rent price without leaving potential income on the table. They can also assign the right price such that tenants will not be forced to find another rental place to live in.
- Conducting property showings: For long-distance property investors, engaging the services of a local property manager means having a reliable representative to perform the showings in person. Living far can be limiting and will cost more time and money for the owner to keep visiting the rental every time a prospect asks for a property tour.
- Dealing with tenants: Managing tenants can be challenging. Property management companies are able to screen prospective renters well, resolve complaints, collect the overdue rent and even start the eviction proceedings when necessary. An excellent property manager can be your professional representative and will handle the tenants’ needs while you concentrate on other ventures.
- Overseeing maintenance and repairs: Properties need regular maintenance and require repairs eventually. A property manager will have a ready network of well-vetted vendors who can ensure that the rental unit is in peak condition.
Deciding on Self-Management Vs Rental Property Management
Is self-managing or hiring a property manager right for you? As a property investor, it’s important to consider and evaluate the best strategy in the long run. Take time to decide on what’s best for the rental property. Think about which one will help you achieve your financial goals over the long term. Look at the benefits and drawbacks of each strategy.
Just remember that not everyone is suited to self-manage a property. You should have great interpersonal skills, the right knowledge and a cool composure while handling setbacks. You should be able to operate your rental with the mindset of a businessman. In the end, you want to maximize your returns from your real estate investment.
Self-Managing a Rental Property
Performing the responsibilities of a landlord on your own is not fit for everyone. Skills may need to be upgraded and it also requires interacting a lot with your tenants. Others prefer a hands-off approach and would rather focus their energy on other essential undertakings in their lives.
The amount of time that self-management takes is also considerable. That’s why you need to weigh properly if the time sacrifice is worth it.
Here are some questions to reflect on that can guide you to the right decision on whether self-managing your rental is for you:
- Do you categorize owning a rental property as a job or do you treat it only as an investment? Self-managing can become a full-time job and will demand a huge part of your attention. You need to have adequate time to commit to operating the rental. Otherwise, hiring a property manager is a sound alternative.
- Do you live near your rental unit? If an emergency occurs, how soon can you arrive and deal with the urgent situation? Should an interested prospect ask for a property showing, can you be physically there quickly? If you’re a long-distance landlord, it’s wise to obtain the services of a local property manager.
A good property management company like Pinnacle Property Management is an investment worth its price. Property investors can multiply their rental earnings and end up saving more in comparison to the management fee they’re paying.