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Property Management

Hiring a Property Manager vs. Self-Managing Your Properties

To Manage Or Not To Manage…

When asking yourself the question of whether or not you need to hire a property manager, you need to first consider what a property manager does. A property manager is someone who operates, maintains, and oversees a property on the behalf of someone else. The property manager is usually the middleman between the tenant and owner and can make owning rental properties much simpler. Some landlords, however, do prefer to self-manage their properties.

In this article, we explore exactly what you need to know when deciding whether or not you want to hire a property manager to reduce your rental property management workload.

The Benefits of Self-Managing

There are many benefits to self-managing your property. Firstly, there is no better way to become familiar with an industry and a job than jumping in headfirst. Owning and managing property means you will need to quickly become familiar with the ins and outs of the industry, from laws and regulations to tenant management idiosyncracies.

Secondly, you remove the risk of miscommunications that can happen if you have a property manager playing middleman to your tenant communications. By dealing with tenants directly you’ll get a better sense of what they are like and you’ll be able to offer better service to improve tenant retention.

Finally, self-managing is far more cost-efficient. As a baseline, your typical property manager will likely charge between 8 and 12% of the monthly rent amount (plus expenses).

The Drawbacks of Self-Managing

Doing it yourself is always a rewarding feeling but the amount of time you need to dedicate to such a role can be immense. Being the one who is responsible for scheduling maintenance calls, chasing those rent checks, and being the go-to for repairs.

Your ability to grow your portfolio is restricted by your capacity as one person. You may be able to work with others, either via partnerships or employment to help with the management of multiple properties. However, if you’re self-managing you are going to be the one who needs to juggle the responsibilities and demands of having multiple tenants at different locations.

Despite this, many landlords do choose to self-manage and by employing tools such as Landlord Studio they can create streamlined processes for everything from tenants screening, to rent collection and income and expense tracking. By automated their property management in this way they can massively reduce the time requirements allowing them to spend more time growing their business rather than managing the day-to-day minutiae.

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The Benefits of Hiring a Property Manager

It’s no secret that having someone do the job for you has its perks. Outsourcing jobs is vital in order to reclaim the time that would otherwise be spent managing your property portfolio.

In the event of a problem, a property manager brings their repertoire of connections, legal expertise, and vendors to the table and can arrive at a stress-free solution fast. Additionally, a property owner who has a diverse portfolio that extends across state lines may be more likely to need a property manager who is closer and can be more hands-on with the rental management.

Finally, property managers bring to the table years of experience and knowledge. Their awareness of real estate codes and regulations will help ensure that all laws and regulations are abided by and a good property manager will also help the property owner maximize their deductible expenses at tax time.

The Drawbacks of Hiring a Property Manager

Calling a property manager and handing everything over in a phone call isn’t how it works. There’s plenty of necessary meetings to be had with property management firms to guarantee you’re getting the right person for the job.

As mentioned above, the cost is a factor that should be considered. Not only could a property manager charge up to 12% of the gross income of the property but there can also be leasing costs. Property managers often charge separately for services such as finding new tenants and this expense can quickly escalate. Suddenly, you could be being charged a full months’ rent during a time when the property has been vacant.

Additionally, a person who has invested their own money in a property is going to want to be involved in the decision-making process. No one cares more about their investments than the person that owns them. By handing the reigns off to a property manager, an owner may find themselves left out of the loop regarding important decisions, and a less trustworthy property manager might be more interested in collecting checks than running a quality rental business and looking after the property.

Final Words

Whether you need a property manager or not is going to come down to circumstances. It’s not unheard of for an owner to manage multiple properties on their own – especially with recently developed automated services. Property owners should enquire about a manager if they fit the following criteria:

  • Hectic daily schedule
  • Expendable income
  • No knowledge of the property industry
  • The intention of scaling up their portfolio (outside of city or state)

Self-managing is a great way to save money, and keep your finger on the pulse. It allows you to gain a deeper understanding of your investments and increase operational efficiencies and cash flow. However, it does require a greater input of time. Thankfully, with solutions like Landlord Studio, you can create streamlined processes and save both time and money when self-managing your rental properties.

Landlord Studio allows you to accurately and efficiently track income and expenses, manage tenant screenings, digitize receipts, collect rent online, and more.

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