It’s well known that rental properties can be an excellent investment opportunity, especially in the U.S. market. Although investing in real estate is labeled as a “passive income” investment, at times it can feel far from a passive endeavor. Screening tenants, creating a lease agreement, collecting rent, repairing maintenance issues, and the additional rental management responsibilities all require constant attention and management – sometimes in the middle of the night when a tenant calls to report the kitchen is flooding.
When it comes to the management of rental duties, landlords have two options: hiring a property manager or self-managing the rental – meaning you not only own the property but also take care of the necessary day-to-day operations. Deciding who and how these responsibilities will be taken care of is an important decision – especially seeing that your rental business is the one on the line. While there are pros and cons to both management styles, self-management undoubtedly provides more control over the figurative reigns of your investment, ensuring that you can always steer it in the right direction.
Before we dive into exactly how to self-manage your rental property, let’s take a look at why landlords might hire property managers in the first place, along with the advantages of self-management.
Why Landlords Hire Property Managers in the First Place
There are numerous reasons why a landlord would hire a property manager to take charge of their rental management duties, but here are some of the most common reasons:
- Time management: Managing a rental property takes time and energy. If you’re unable to dedicate the necessary time required to properly manage your rental, you most likely won’t be able to maximize your rental’s return on investment.
- Coordination: Handling maintenance requests, collecting rent payments, and conducting walkthroughs when the rental is vacant are all time-consuming and tedious. Plus, it isn’t always easy finding reliable professionals to handle rental repairs.
- Filling a vacancy: Marketing a rental and finding a new tenant may be two of the most difficult tasks a landlord manages. By offloading these responsibilities onto a property manager, landlords free themselves from the stress associated with filling a vacancy.
- Tenant relationship management: Unfortunately, relationships between landlords and renters can become strained due to factors such as non-payment of rent. Property managers relieve landlords of this burden by handling issues with tenants.
Advantages to Self-Managing a Rental
Whether it’s one or five rental properties, real estate investors and landlords are running a business. Because it is a business, there are several advantages to self-managing it:
- 100% control over your investment property and rental business.
By choosing to self-manage your rental property, you’ll be able to make decisions that you feel are best for your business. You’ll have the autonomy to set your own marketing strategy, tenant screening criteria, and rent collection process. The main benefit behind having full control of your business is that the decisions you make have the ability to get you closer to achieving your investment goals. Forget the middleman between you and your rental revenue!
Property management companies will cost you. You could see anywhere from 8-12% of your monthly rental revenue going to property management fees. These extra costs can quickly eat into your rental income. By avoiding unnecessary costs, like paying a property manager, you’ll achieve your investment objectives much quicker.
- Your property will be in good hands.
Why? Because they’re your own! Unlike self-management, hiring a property manager is never a guarantee that your investment will be well-cared for. Even professional property management companies can fail to do what’s best for your rental business. By self-managing your rental, you can do your due diligence when it comes to fulfilling your rental management duties.
- Closer and stronger relationships with your tenants.
It’s no secret – finding and keeping a good tenant can increase your return on investment. A crucial part of having a good tenant is fostering a strong relationship with them. For property managers managing multiple rentals, this can simply be a difficult task to accomplish. Self-managing your rental lets you have one-on-one time with your tenant from the time you screen them to when they move out five years later. Check out this article on how to build great relationships with your tenants.
- Learn and gain experience in the rental industry.
Want to understand the inner workings of your rental business and the greater rental industry trends, plus landlord-tenant laws, that may affect it? Be your own property manager. By doing so, you can become an authority on both your business and the industry. You’ll utilize tools like rental property calculators that will help you make good, if not great, investment decisions. But if you decide to take the back seat in the management of your rental property, reaching your investment goals may take much longer than you would prefer.
How to Be Your Own Property Manager
If you decide to go the do-it-yourself route, it’s important to realize you are not alone. There are numerous property management software platforms available for real estate investors like yourself. Not only are DIY platforms a viable option for managing rental duties like tenant screening and rent collection, they too can provide support, tools, and education for a wide range of rental property issues. Most importantly, these platforms can help you avoid the costs and other disadvantages associated with a property manager.
In stark comparison to property management companies, DIY landlording is far less expensive, so you’ll get more money out of your investment. Much of the time software platforms are free for landlords, only charging for premium features or one-off purchases. If your goal is to make as much money as possible from your rental, you’ll certainly want to consider doing it yourself with landlord software.
Everything is online
Performing all the tasks associated with a rental property manually can be exhausting and time-consuming, but moving everything online with property management software can help landlords perform all of the tasks nearly automatically, which saves time, increases efficiency, and improves profitability. Plus, all of your important records and documents get stored in one place. Online software solutions are also great for tenants who wish to pay their rent or submit maintenance requests online.
With good DIY landlord software, every tool that a landlord needs is available in a single place. Rent estimates, comprehensive marketing, tenant screening, rent collection, and maintenance tracking can all be found on these platforms. Such platforms may even offer educational resources that cover difficult issues like evictions and go as far as keeping you up-to-date on important landlord-tenant laws that could affect your rental business. Many are beginning to create tools for tenants like rent reporting.
Still Considering Hiring a Property Manager? Do This First
We get it – running a rental business is hard work, and there is no shame in needing assistance. But, choosing the right property management company is an important decision to make. To find the perfect fit for you and your rental business, ask potential prospects these eight questions before you consider hiring them:
- How much are the management or leasing fees?
- Do you have a license to manage properties?
- How much experience do you have managing rental properties?
- Will you take care of repairs and cleaning?
- How will you market my property?
- What does the rental application process look like?
- How do you screen tenants?
Deciding between a property manager and a do-it-yourself approach can be difficult, but when equipped with the right knowledge and awareness of the advantages and disadvantages of both management styles, landlords can confidently make the right decision for themselves and their business. If you opt to be your own property manager, don’t forget – help is always available in the form of online property management software.
Ready to get started on your own DIY landlord journey? Try out TurboTenant today! TurboTenant is the leading all-in-one property management software that will streamline your rental process through the entire vacancy cycle – for free.
This guest post has been contributed by our friends at TurboTenant.