Managing a property is not an easy task. It calls for a good amount of commitment on the part of the owner due to the need to carry out constant management tasks like chasing late payments, ensuring the welfare of the tenants, performing regular inspections, and so on.
An experienced property manager is privy to up-to-date, vital information necessary to run the business smoothly.
Property managers have access to a wealth of real estate resources that are key to the effective marketing of the property. This is not something that one can say of self-management, which could ultimately impact rental returns.
1. This job is often very demanding.
Unless you are a retiree or unemployed with lots of time to spare, you may find it difficult to properly manage your investment property. There are so many tasks that will require your attention, from maintenance requests to dealing with bad tenants, it can be overwhelming and you’ll have to respond promptly to your tenant’s complaint and maintenance issues. Even when they call you at three in the morning because of a plumbing issue.
2. You may not screen tenants properly.
Unlike hiring a property manager, self-managing means that you’ll have to screen all your prospective tenants. Unfortunately, without proper experience, knowledge, and resources, you may end up with bad tenants.
A bad tenant is someone who:
- Won’t pay their rent on time
- Won’t take care of your property
- Is a nuisance to other renters
- Won’t be easy to reason with when there’s a problem on the property
On the other hand, property managers have the skills, information, and manpower it takes to process the pile of applicants fast and efficiently. That means they have a trained eye in spotting good potential renters out of the many who apply.
More importantly, they have methods of performing thorough background checks. This includes credit checks, employment history, public records, eviction records, criminal history and more.
3. You’ll have to face rent collection and eviction issues on your own.
DIY rental management means that you’ll be responsible for collecting rent. It can also mean playing “cat and mouse” with some of your renters every month.
This can be frustrating, tiresome, and time-consuming.
Moreover, you’ll have to deal with lengthy and expensive legal proceedings if you must evict a bad tenant. Not to mention the marketing expenses you’ll incur to get new tenants.
That’s why hiring a property manager may be ideal. Since their job is to take over all property management responsibilities, they will :
- Find good tenants
- Collect rent on time
- Mitigate eviction expenses
4. Some of your mistakes can be costly.
It’s true that self-managing presents you with an opportunity to learn and gain experience. However, it also means that you’ll be experimenting with your rental property.
Too many mistakes can lead to massive loses or even closure. That way you’ll learn a few things from them up until you’re confident enough to do it yourself. It’s cheaper and safer that way and you’ll get to enjoy the benefits of owning a rental property.
5. You may end up spending more than you should to run and maintain your rental property.
To get better and higher returns from your investment, you have to make sure you mitigate your expenses. That means exploring your tax benefits, getting discounts from vendors and service providers, avoiding legal disputes, minimizing maintenance costs, and so on.
That may be hard for you, especially if it’s your first time. Reputable property managers know what to do and how to minimize operational costs while doing it.
6. Falling foul of the law
We’ve saved what is probably the most important point until last – getting on the wrong side of the law. Being a landlord can be a minefield if you’re not legally minded. Even if you are, legislations change, so you need to be prepared to keep abreast of new rules and regulations.
DIY property managers can really come unstuck with the legal side of being a landlord, and the consequences can be very serious indeed. Custodial sentences are not unusual, so this isn’t something to be taken lightly. Knowing the relevant laws is of utmost importance.
A good property manager will protect you from such disasters as they’ll be constantly monitoring the legal side of things for you. They’ll be aware of any new rules and laws before they come into play and they will inform you of any changes you need to make in order to stay on the right side of the legal fence.
We understand managing a rental can be complex, especially in terms of legal obligations and requirements and we believe a great property manager is worth their weight in gold. So while self-managing might be the preferred option for those who can cope with the workload and understand the legal liability risk that is involved with DIY, engaging an agent can be a wise move to ensure a good return on an investment.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.