Self-Management vs Property Management: Which is better?
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The biggest decision you have to make as a landlord is deciding whether you want to manage your properties on your own or whether you want to hire a property manager.
This is one of those time vs money trade-offs, and ultimately only you know your financial situation and numbers well enough to disconcert when you are getting diminishing marginal returns for time output put into self-management. Obviously, the more properties you have, the more worth it is to have property management services put in place. This is one of the things we specialize in. If you want real estate investment consulting of this nature, contact us here.
Self-management vs Property Management:
- Advertising vacant units, screening tenants,
- What does a property manager do:
- Advertises Vacant Units
- Has a screening process for potential tenants that consists of screening, approving, and signing leases for tenants
- Handling phone calls from tenants
- Scheduling maintenance-related phone appointments
- Issuing late notices
- Filing evictions, if needed
- Keeping a record of income and expenses
- Paying for the property bill
Benefits:
- Saves lots of time
- Don’t need to set up infrastructure for self-management
- Already has contractors
- Brand awareness for tenant lead generation
Downsides:
- Price can be anywhere from 8–10% of your monthly cash flow, which eats away at your bottom line + a large percentage fee (anywhere from 50%-100%) of one month’s rent for when a tenant vacancy is filled
A Property management company will never care as you care. Therefore, you will still need to “manage” the manager to ensure everything is up to par, especially in situations like repairs and contracting, where a property manager does not have the skin in the game to do things like price negotiations and get…
