Investing in a rental property is an excellent way to build wealth, but the work put into maintaining one is never ending. You may find yourself considering whether it’s worth hiring a property manager to take over the day-to-day work. As goes with most things, there are pros and cons to both options, and ultimately, it depends on what your overall goal as a property owner is. Let’s break down the good and bad between managing your property on your own vs. hiring an expert to delegate work to.
The pros of self-management
If you are self-managing your rental property, you are handling the day-to-day operations necessary to make things go smoothly. You’re keeping the property up-to-date and are the main—or only—point of contact for tenants regarding any unit issues that may come up. Is it time consuming? Sure, but there are perks to be the sole handler of your property.
Managing your own property gives you greater control over daily operations and since you’re the one making all the decisions, there is no delegating of work. If finances are tight until you get your footing, it’s also a smart financial move to not hire a manager and instead save what you would pay in salary for yourself. Handling all operations—as well as any other landlord responsibilities yourself—means you’ll have a greater opportunity to get to know your tenants and have closer relationships with them.
The cons of self-management
While, yes, you may save money not hiring a property manager, that only means your free time becomes that much more valuable and harder to come by. The list of management responsibilities include advertising your property, collecting rent, making necessary repairs, fielding complaints, enforcing the lease, and doing preventative maintenance, among many other things. Managing a singular property can also take time away from any future business ventures or other property investment you might be eager to pursue.
Without enlisting a professional, you may not know what appropriate rental rates to set for your property. Setting rent too low can present a serious missed income opportunity, though setting rent too high can also prevent you from filling units. Having someone who knows the area and the local rent levels for other places nearby can help make your property an appealing option.
The pros of hiring property management
If self-management means you are essentially a one man or one woman show, then having a property manager means you are delegating work to a hired professional. The long list of duties listed above would be passed onto the manager while you focus on making your property thrive.
Hiring a professional frees up more of your own time so that there is a real separation of your personal and professional life. While being a landlord is an around the clock job, having another person onsite can help you lead a more balanced life instead of focusing 100% of your time solely on the property and your tenants.
A manager who is provided by a property management company can also support the filling of units by handling the screening processes. If you’re new to the world of property rentals, you may not be as familiar with how to gauge prospective tenants or conduct inquiries.
The cons of hiring property management
If you’re not the go-to person for tenants’ unit issues or rent payments, there’s far less face-to-face time, therefore decreasing the likelihood that you become familiar with who your tenants are. Additionally, outsourcing the management responsibility to a company that isn’t as reputable or doesn’t deliver a knowledgeable manager with quality service can essentially make things more complicated for you as the landlord.
Ultimately, you’ll have to decide for yourself what your long-term goals are for your property and what you want your role to be. If it makes the most sense for you to hire a property manager, there are key questions you should ask yourself before scouting out potential hires. What fees do they require? What is their eviction track record like? How do they screen tenants? How do they handle missing or late rent payments?
Whether you handle your property yourself or decide to hire a manager, how tenants are treated, and the property is handled will impact your reputation as a landlord. Whichever direction you decide to go in, make sure you’re making an informed decision to put your best foot forward. And get the right financing partner in place for your next rental property with Temple View.