Investment Property Management: Hire a Property Manager or Do It Yourself
Just bought your first investment property?
Congratulations, your patience and persistence has finally paid off. You are now on your way to earning passive rental income for many years to come.
That being said, buying your investment property is only half the battle. To win the other half, you need to ensure that it is properly managed. After all, property management can make or break your real estate investing experience.
So, which way should you go – should you hire a professional property management company or should you self-manage your property?
This is what this article aims to answer. To help you make an informed decision, we’ll analyze the pros and cons of each option for you.
Pros of Hiring a Professional Property Management Company
Pro #1: Lower vacancy periods.
Tenants don’t stay forever. At some point, they will eventually have to leave and you will have a vacant unit to deal with. And as you probably know, long vacancy periods are bad for your bottom line.
Once a tenant vacates the unit, your goal should be to find a replacement tenant as quickly as possible. Property managers are skilled at doing this. Remember, property management is all they do.
Hiring a professional manager will, therefore, ensure your property has shorter vacancies.
Pro #2: Quick responses to maintenance issues.
Dealing with maintenance issues is arguably one of the biggest inconveniences of self-managing a property. They usually crop up at any time and can be a bigger problem that you may not be prepared for.
On the other hand, a property manager has vast experience in regards to handling all types of maintenance issues. Including, handling emergency ones like severe electrical problems and plumbing issues.
Pro #3: Frees up your time.
Property management is time-consuming. You will be on call 24 hours a day, 7 days a week. So, if you decide to self-manage, you should be prepared to leave your kid’s soccer game early to handle an issue at your property.
And besides that, you will also have other responsibilities like rent collection, leasing, and marketing. Managing your property essentially becomes your second job.
But by hiring a professional manager, you will be able to go about your life without any constant interruptions.
Pro #4: Professional help from an experienced person.
A property management company will usually have many years of experience managing homes under their belt. In addition, many will have an education behind them as well, as many states require that they are licensed.
Cons of Hiring a Property Management Company
Con #1: It comes at a cost.
Cost is perhaps the biggest obstacle many property owners see when it comes to hiring a property manager. Generally speaking, the cost of hiring a property manager is usually anywhere between 8-10% of the monthly rent.
So, if your property is bringing in $2,000 a month, you should expect to part away with between $160 and $200 in property management fees every month.
Con #2: Lack of involvement.
Property managers work best with a hands-off approach. Typically, as an owner, you’ll likely not get involved in trivial matters like minor maintenance issues or tenant issues.
Pros of Self-Managing your Rental Property
Pro #1: Minimize your expenses.
This is obviously one of the top reasons why most property owners decide not to hire property managers. This is especially important if you are looking to maximize the rental income from your rental property.
Pro #2: Have complete control.
As the landlord, you will have complete control over the running of your rental property. You will get to decide who to rent to, how much rent to charge, and whether to have a short-term or a long-term lease, among other things.
Pro #3: Gain experience.
Managing your rental property will also enable you to acquire crucial property management experience. While there may be hiccups along the way, this may be advantageous to any landlord that wants to focus more on management in their real estate career.
Pro #4: Close relationship with tenants.
You can also expect a closer relationship with your tenants by self-managing your property. That’s because you will be their point of contact.
Cons of Self-Managing Your Rental Property
Con #1: Can be stressful.
If a tenant fails to comply with a policy, you will be the one confronting them and taking all the necessary actions. For example, evicting them. If a tenant bursts a pipe, you’ll be the one figuring out a way to get it fixed.
Con #2: It can be time-consuming.
Being a landlord involves a lot of responsibilities. Among other things, you have to know how to find and screen tenants, carry out property maintenance, and collect rent. Your duties will also multiply should you have multiple properties to take care of.
There you have it. The pros and cons of professional property management versus self-management. You should choose the option that works best for you based on your own needs.
About the Author
Real Canadian Property Management Solutions manages rental properties in Grande Prairie, Alberta and surrounding cities. If you're looking for help managing your rental properties in Grande Prairie, Alberta, we’ll handle showings, inspections, tenant screenings, property marketing, maintenance, and renewals for you. You just deposit the rent.
RCPM Solutions can be reached via email or contact form.
