Landlords with one or more rentals either immediately or later on need to weigh up the pros and cons of using property management firms. The alternative is to self-manage, which landlords who have done it realize it’s neither straightforward nor hands-off.
Owning rental properties requires hands-on management, and not all landlords have the time or the inclination to do it. Therefore outsourcing to a trusted property management firm is the right solution. For landlords unsure which action to take, read on to learn more about professional property management.
Motivation To Use Property Managers
What typically motivates landlords to use third-party property management companies?
The primary reason landlords use a property management company rather than self-manage is to save time.
Managing rental properties can be a full-time job, and many landlords usually have full-time jobs, so they don’t have the time for property management. While managing tenants and properties may be attractive to some landlords, it’s not lucrative, and their day job pays a lot more.
Property investors own rentals as an investment strategy. There is the added cash flow they provide – i.e., the profit from the rental income after expenses.
Plus, over time, real estate beats inflation and has a higher return on investment than leaving your savings in a low-interest bank account. When it does come time to sell, the homes will be valued far higher than when they were purchased.
Others are simply weary of the demands of tenants, the tenancy laws, and upkeeping their properties, so they leave it to the experts, i.e., property managers.
After a full day at work, many landlords want to spend time with family and friends, not at their rental properties dealing with maintenance!
Property management companies have the resources to handle maintenance requests quickly and efficiently, from minor repairs to major renovations. They also have access to a network of reliable contractors who can provide quality work at competitive prices.
Landlords can save money on repairs and prevents more serious damages from occurring due to overdue maintenance requests. It also ensures that each rental property is well maintained, reducing tenant turnover.
There is less risk of taking the wrong action with tenants and the property when managed by a third party. Property management companies do everything from tenant screening and leasing to maintenance and repairs. Plus, they have access to resources that can help quickly resolve tenant disputes or other problems that may arise.
Getting a third party to handle rent collection, evictions, legal issues, and more is less risky.
The greatest risk is not knowing the landlord-tenant laws and regulations of the area you have your rental properties. Not all landlords live in the same location or State as their rental properties, and the laws are not the same throughout the USA. Using a property manager relieves the landlord of this task.
One of the most stressful tasks as a landlord is finding suitable tenants. Thankfully property management companies are experienced in marketing and advertising rental properties, which can help landlords secure tenants quickly.
Knowing how to screen potential tenants is a skill that an experienced property manager uses adeptly to ensure that only qualified renters move into your properties. This helps reduce the risk of non-payment or other issues that may arise from unqualified tenants and takes the stress/hassle of these tasks off your plate.
Motivation To Self Manage
Some landlords don’t want to let go of the responsibility of property management.
Being in control of your rental properties is worth the trade-off of free time. By self-managing, landlords can have more control over the day-to-day operations of their rental properties, including selecting tenants, setting rental rates, and handling maintenance and repairs.
Landlords with few properties may find it more practical to self-manage rather than hire a property manager.
No property management fee
Some landlords prefer to handle all property management tasks themselves to save money.
Instead of a property manager inspecting your rental property, you will do it and know exactly its condition and how the tenants are looking after it.
Some landlords have experience managing rental properties or have expertise in real estate, making them feel confident in their ability to manage their own properties.
Outsource or DIY?
Most landlords use property managers to save time, avoid stress, and ensure that their properties are well-maintained and rented out to reliable tenants.
Property managers enjoy the tasks, including advertising vacancies, screening tenants, collecting rent, dealing with maintenance and repair issues, and responding to tenant complaints. By hiring a property manager, landlords get a lot of value from their expertise and experience in managing rental properties while freeing up their own time and energy to focus on other priorities.
There will always be landlords who prefer to self-manage their rental properties. However, landlords with multiple properties, those who have invested in homes in different locations, and new property investors prefer hiring a property management company. If you’re considering outsourcing your rental property to a property manager, you’ll want to ensure you choose one with a good reputation. Do your research, including asking other landlords who they use and looking at customer reviews.