Property Managers vs DIY Rental Management
Whether you have one rental or half a dozen, managing a property investment can suck up a good deal of your time and energy.
In an ideal world, your tenants won’t call you about plumbing issues, you won’t have to chase up rent, and you’ll never have to evict anyone. Of course, this is wishful thinking. With a rental you have to expect the unexpected.
And the more rentals you have, the more you’ll be kept on your toes.
This is not to say DIY rental management can’t be an enjoyable pastime. For those who have a head for property management, and are handy with a spanner, it will give you more control over your properties and, of course, be more profitable since you won’t be paying a property manager to do the job.
But if you’re at the stage where you’re thinking it would be nice not to deal with tenants, or tradespeople, then a property manager is the way to go.
Let’s look at some pros and cons of property managers vs DIY rental, so you can see at a glance which is the right option for you.
Pros & Cons of Property Managers
- A good idea if you have a few properties, or you don’t want to be a hands-on landlord.
- They take care of marketing and showing the property, conducting credit checks for the tenant selection process, and preparing tenancy agreements.
- They ensure rent is paid on time and will chase up overdue rent payments on your behalf.
- They liaise between you, your tradies and your tenants for any maintenance work that needs to be done.
- They conduct regular inspections to ensure your property is being looked after.
- They provide you with paperwork to help with your taxes and deductions.
- They know the correct the procedures to follow, especially if a dispute arises.
- They let you focus on your life away from your investments.
- They shave off a percentage of your rental income, usually between 7% and 10%.
- If they manage a lot of properties, yours may slip under the radar.
- Not all property managers are experienced. Often newbie real estate agents start out in property management to get some hours under their belts. They may not have the skills to manage conflicts or disputes.
Pros & Cons of DIY Rental Management
- You don’t have to pay property management fees, which saves you money.
- You learn how to choose good tenants by meeting them face-to-face during the screening process. Learn/increase your people skills.
- You’re in control of how soon you tenant a vacant property, whereas a property manager may be slower in starting the ball rolling.
- More control of the overall care and maintenance of your property, and you can keep a closer eye on it. If the property is a new apartment it won’t need much maintenance.
- DIY rental management may involve a significant time commitment.
- You need to have some marketing knowledge to market your properties effectively, find new tenants, and keep property vacancies at a minimum.
- You need to know how to effectively screen tenants and what questions to ask.
- Chasing rental payments can be stressful and time consuming.
- Have to schedule time to show the property and conduct inspections which can be inconvenient if you’re busy.
- Need to keep up to date about the various tenant/landlord laws and fair housing rules.
Hopefully the pros and cons outlined above will help you consider all the factors involved in each scenario. Always do your homework if you do decide to use a property manager to ensure they can handle the job. Find out their processes for selecting tenants and chasing up rent. Ask to see references.
If you’re looking for an expert’s advice on obtaining finance for you property investments get in touch with Ethan today to discuss your personal circumstances.