drawing | Self-Management vs Property Management

Self-Management vs Property Management

Self-Management vs Property Management — which one should you choose? For the longest time, property owners have been asking this question, trying to determine which option is the best way to go. On that note, let us break down how these two management routes differ and what each one poses in terms of advantages and disadvantages.

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Self-Management vs Property Management: Which One Is Better?

Property owners often find themselves with the dilemma of whether to hire a property manager or not. It is a simple question, but one with a complicated answer. Both options offer benefits and drawbacks, with each management aspect handled in a different manner.

 

1. Filling Vacancies

Filling vacancies is a standard service most professional property management companies provide. You naturally want to find a tenant for your rental property and minimize the amount of time it stays unoccupied. Although it is possible to accomplish this yourself, filling vacancies requires a lot more work than simply posting an ad online.

This is where property management has the upper hand. A property manager can create compelling marketing materials and advertise your listing both online and offline. They determine the right channels by performing market research, which is something that takes time and expertise.

Plus, you can’t just offer your rental to the first person who contacts you. You must filter through applications, screen potential tenants, and schedule property showings. You must perform criminal background checks and verify credit scores. Beyond that, you also need to prepare a comprehensive lease agreement that will protect you and the tenant from liability. Needless to say, there is a ton of work that goes into it.

 

2. Collecting Rent

rent | self property managementMost property owners mistakenly think that rent collection is the easiest part of the job. The truth is, you can run into a lot of problems with tenants when it comes to rent payments. While a good number of tenants pay rent on time and in full, there are those difficult tenants that either pay late or only partially.

Of course, you can always deal with late payers. For self-managed rentals, that means calling your tenant yourself and following up on their rent. Most of the time, they will have an excuse ready, and then you will need to wait a while longer to receive the money. Other times, they won’t even pick up and just go off the grid. Some tenants even lie about having already sent the check in to buy themselves more time.

With a property manager, you won’t need to worry about all these situations. Property management companies can take care of setting and collecting rent, late payments included.

 

3. Handling Maintenance

Perhaps one of the most glaring differences when it comes to self-management vs property management is maintenance. You’re lucky if you get a tenant that treats your property as if they own it. Most of the time, though, tenants don’t really care. Delinquent tenants may even damage your property intentionally out of spite after they receive another notice of late payment from you. This results in harder wear and tear, which demands more maintenance and repairs.

With self property management, you must handle all maintenance work yourself. While that does not necessarily mean you need to do the dirty work, it does mean finding contractors, scheduling appointments, and overseeing the job. You also need to schedule routine inspections and have an emergency plan. Tenants have a right to livable conditions, and violating this right can get you in serious legal trouble. When you hire a professional, though, a property manager can do all that for you.

 

4. Communicating With Tenants

If you decide to take on the responsibilities of a landlord, you must be ready to talk to your tenants regularly. That means checking in on them a few times a year or at least once every 3 months. This is so you know everything is working fine. If your tenant brings up an issue, you need to address it yourself.

Moreover, if your tenant calls you, you need to answer it even if it’s the weekend or you’re in the middle of a dinner party. Tenants will approach you when they have complaints, however minor. And you can’t always assume they’re just calling about a small issue. They may be calling you because of a legitimate problem, so you need to answer.

For some landlords, always being on call is perfectly fine. However, others find it irritating and unnecessary. You also need to filter through their complaints and discern which ones actually need your attention. With professional property management, you can save yourself the headache.

 

5. Enforcing Contract Terms

Lease agreements exist for a reason. You and your tenant signed it, agreeing that you will both follow the terms outlined in your contract. But, some tenants break lease terms, not caring about the possible consequences. When that happens, you must know what to do. As a landlord, you should enforce the contract terms and send your tenant a Cure or Quit notice if they violate the agreement.

When you go for property management, you won’t need to think about your rental agreement. Your property manager can draft an ironclad contract for you and see to it that the tenant follows all the terms.

 

The Cheaper Option

The reason a lot of property owners choose to take the self-management path is it’s ostensibly cheaper. When you hire a property manager, you need to pay them a monthly management fee. This can come in the form of a base rate with added fees for extra services or a percentage (typically 5-10%) of your rental income. Understandably, property owners feel reluctant about professional property management as a result.

 

The Pros and Cons of Self-Management

Apart from the cost, self-management also comes with other benefits. For instance, you have complete control over tenant selection. You can also devote all your time and attention to managing your property, whereas property managers usually have more than one property to manage. Beyond that, you will definitely learn a lot about property management and how to do it the right way, though you may need to go through a trial and error process.

On the downside, managing a property — even if it’s just a single on — is not easy. Self-management, while a noble route, is both time-consuming and exhausting. It requires a certain level of expertise and excellent communication skills. You also need to stay informed of all related laws to protect yourself from liability.

 

The Pros and Cons of Property Management

proscons | professional property managmentThere are plenty of benefits that come with professional property management. Perhaps the biggest draw among them is it makes life easier for you. Property managers have a better understanding of the rental market and possess the expertise to perform all the necessary tasks. Companies also typically have great connections when it comes to contractors and more advanced technological resources. In the end, you can look forward to more free time as well as much lower vacancy and delinquency rates.

Of course, all of this isn’t to say professional property management is not without its flaws. On the contrary, it also has its drawbacks. Aside from being the more expensive option, you don’t always know when you’re getting a good property manager to handle your investment. There are definitely a few bad eggs in the property management industry. Some may not treat your property as a priority due to other ones on their plate. You may also inadvertently hire an incompetent property manager or a dishonest property manager.

The best way to shield yourself from this is to start from the beginning — the selection process. Make sure to choose the best property management company that is both affordable and offers high-quality services.

 

Deciding Between a Property Manager vs Landlord

Choosing between self-management vs property management has always been a dilemma for a great many property owners. It’s not always easy to admit you need help, especially when it comes with a price tag. Self-management will always be an option. But, if you want to find peace of mind and earn extra income from rentals at the same time, you may want to consider hiring a professional.

In search of a property management company, HOA management company, or real estate agent in Florida? Check out Florida Property Management’s online directory.

 

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