Any real estate investor would, at some point, consider hiring a property manager or handle everything themselves. There should be a thorough understanding of the pros and cons of these options to manage expectations and dodge any unnecessary hurdles.
It could be wise for a neophyte in the industry with a few units to do it themselves, while someone with an expanded business could use the help of a property manager, especially when there is enough source of budget for it.
To help you choose what would be best for your business, we’ve listed some things below for you to mull over.
Understand what property managers do
Aside from saving you from all the stress of being a landlord, they come up with marketing strategies for your property, attend to tenant concerns, collect rent, handle legal issues, and be on top of maintenance work. Their service comes with a price as they save you more time.
Usually, they are employed by a management company, asking for a fee of 10% or less of the total monthly rent.
While the idea of someone doing all the work for you is appealing, you must still have good reasons to hire one unless you have tons of money to spend. Some of the things you should think about when you’re considering hiring a property manager include whether you have several properties to handle, bandwidth to do the tasks, and your distance from the place, among others.
Though, suppose you only dread the landlord tasks. In that case, you can consult the property manager or the company he’s in if they offer an option where there could be a division of tasks between the two of you that would require a lesser management fee. Moreover, this will allow you to have control over the responsibilities of your preference upon alignment.
The more likely it is that a property manager would be needed is when you have multiple units and are always occupied with other commitments. Regardless of who is in charge, streamlining the processes is a must, so utilising technology such as property management software could come in handy to minimise work hours as much as possible. Now, let us start comparing.
Managing properties yourself
This could certainly turn out good and successful with proper planning. There are a couple of landlord software platforms that could help you methodise your management process after all.
It could make tenant screening, rent collection, and even taxation easier for you. Should you choose to become a do-it-yourself landlord, you will enjoy complete control over every aspect of your property, especially the vetting of prospective tenants.
Another obvious advantage of a DIY landlord is the lesser management cost, allowing you to save more money from the rental investment. The only thing that you might need to spend on is a premium account of landlord platforms which is far less expensive than the charge of a property management company.
Since everything is also online nowadays, marketing and rent payments would also be just at the tip of your fingers.
You will only have to allot time to understand the available platforms, study some strategies employed by other DIY landlords, and enhance your time management skills. Going with this approach is pretty straightforward since you mainly need to deal with your concerns to attend to your rental properties compared to getting the services of a property manager, which can be more complex.
Hiring a property manager
If you’ve concluded that it will take you so much time to do the job yourself and that you’re just not fit for all the tasks, start considering how much you will be paying a property manager.
The cost for one is a trade-off that many property owners accept, especially with the comfort of knowing that a professional is handling all the day-to-day work. Since they would be managing the daily operations, you get to draw away from time-consuming tasks such as doing maintenance work and answering a couple of calls.
Perhaps the most convenient aspect of having a property manager is that you won’t need to deal with late payments, which most homeowners dread. They have systems in place for payment collection and even a screening process ready for potential tenants.
Aside from dealing with tenants, they also analyse the area’s rental competition, which would be the basis of your listing and rental rate. Though, of course, there are also some disadvantages when opting to hire a property manager.
This includes the added expense of their professional fee, less control over your property, processes that are not of your liking, and possibly higher costs for their in-house maintenance crew, among other things. Therefore, you should study the ins and outs of the property management company you’re going to deal with once you’ve decided you want to hire a manager.
Like many other ventures, there are risks and complexities involved which you should be aware of before jumping right in. Either route, being a DIY landlord or hiring a property manager, would take time. Decide what would be best for you after considering the points above. All the best!
Date: 16th of August 2021 Content writer – Author: Kat Sarmiento firstname.lastname@example.org
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