When you invest in rental properties, the key is to make sure every aspect of leasing the property is handled efficiently. Thus, deciding early on whether to manage the properties yourself or employ a property management company is so important.
Before choosing whether to invest your time by self-managing, or pass the management duties along to a property management company, you must understand all the duties required of maintaining a successful rental property.
Here are some of the duties one must be aware of to handle the rental property effectively: –
- Handling vacant property
- Tenant relations
- Rent collection
- Lease enforcement
- Raising rent
- Tenant turnover
Now, let’s discuss the benefits of both the approaches
Benefits of self-managing your investment properties that may help convince you this is the right option for you
Save on Management Fees
All property management companies charge a certain fee (which maybe 10%-18% of monthly rent) for their services. If you self-manage your properties, you can avoid this additional cost.
However, if you choose to forgo a property management company, you will have to handle all the expenses related to leasing your home on your own. This includes advertisement fees, tenant-screening services, maintenance and upkeep of the property, and any legal matters you run into including attorney, filing, and court fees.
In the end, despite saving on a monthly management fee, you may be spending more by managing the property yourself.
Direct Involvement in Day-to-Day Activities and Decisions
When you manage your own income property, you are directly involved in everything related to your property. You have total control over things like advertising your vacant rentals, hiring contractors for maintenance issues, and collecting the rent from your tenants.
Escape from unprofessional companies
While there are plenty of ethically sound property management companies, but many investors may run into part-time property managers that can negatively affect your entire rental property business. Thus, handling your property yourself helps you avoid such companies that do not follow the housing laws set in place to protect both you and your tenants.
Note: To check whether you are giving your property to a broker or full time property manager, just find out whether the majority of their revenue comes from management fees or from brokerage. Simple!
Benefits of hiring a property management company
Property management companies come as an all-in-one management package. They have procedures in place that will help the leasing process go smoothly at all stages. This includes tenant screening, rent collection, lease applications, eviction procedures and even knowledge of landlord/tenant laws.
Ability to Save Time
Employing a property management company will free up your time to do the things you enjoy. This is especially true if you own multiple investment properties. You will not be responsible for late night emergency repairs, annual inspections, or countless time spent marketing vacant properties.
With right Property Management Company, you will have the opportunity to advertise your rentals aggressively across many platforms. This way, you have the opportunity to place top-notch tenants in your property who are likely to pay on time, care for your rental property, and ultimately stay long term.
Increased Supplemental Income
With an extensive knowledge about the current market and the ability to create appealing rental homes to move in right away, your property manager will get the highest valued rental rate possible.
Proper Legal Backing
Property management companies are in the business of dealing with all hassles related to rental property. This also includes any legal matters that involve your tenants such as, excessive property damage, failure to pay rent, and other breaches of the signed lease agreement.
In the end, deciding to self-manage your rental property or hire a property management company is largely a personal one. However, each option has plenty of benefits that will help you succeed in the rental property business.