There is a lot that goes into being a landlord. You have to understand housing laws, manage repairs, run market analyses, and be a people person all at once. Property managers exist to make landlords’ lives easier, but that doesn’t mean landlords don’t often find success on their own. To help you decide which avenue suits you best, this article will review self-management versus property management andwhich is better.
What Is Self-Management?
Landlords who utilize self-management rely on their own knowledge to get things done. In this way, you become your own property manager, and you handle all the duties that keep a rental property running smoothly. This means that not only are you in charge of finding a tenant and collecting rent, but you’re also responsible for keeping up with housing codes. Additionally, you’ll have to keep up with changes in local state laws, screen tenants, address complaints, manage amenities and repairs, and potentially deal with a lot of different personalities.
Pros of Self-Management
Self-management means that you’re essentially the boss of your own company, and if you have the know-how, you can become extremely successful. Your rental property is completely your own, which means you have complete say in what happens to it and where the money goes. You don’t have to pay any additional fees to a property manager if you’re self-managing. And if you become completely self-reliant and dedicated, you can save even more money.
For example, if you’re good at construction repairs, electrical work, or plumbing, you don’t need to call expensive repairmen to get the job done. You can utilize all the skills you have to buy what you need, do the repair, and keep the money you would have spent on a repairman to yourself. And if you’re dedicated, you can learn the appropriate housing laws to make sure everything is abiding by legal standards.
Additionally, when you self-manage, you get to know your tenants and have a much more personal relationship with them than if you hired a property manager. This way, you can build trusted relationships and even make connections that can further your rental business. Self-managing means cutting out the middleman and being the master of your own ship.
Cons of Self-Management
While being completely in charge of your own business may sound great to some, to others, it can be overwhelming and intimidating. Additionally, not everyone is cut out for how much responsibility and time goes into self-management. Handling repairs, evictions, and vacancies while juggling law knowledge, market analyses, and property advertisements won’t leave you with much free time.
Additionally, not being up to date with Fair Housing Laws and local housing codes can get you into a lot of legal trouble. This also means you don’t have any safeguards or professionals to point out any mistakes. For example, if you forget to get written permission from an applicant to run a background check and run the screening process, you’ve conducted a highly illegal act. Additionally, if you ask an illegal interview question or forget to put a tenant’s security deposit in the right account, you can get into a lot of legal trouble.
And because you’re dealing with people, you’re bound to run into those you don’t necessarily like or get along with. This is compounded by the fact that you’ll eventually run into awkward situations, unhappy tenants, and possibly difficult evictions. A property manager can be the middleman and the buffer between you and difficult-to-navigate situations.
What Is Property Management?
Property managers take on all of the responsibilities a landlord would usually have to deal with for a fee, usually from your monthly rental income. However, you still own the property and can continue to handle any other responsibilities you still may want to oversee. They can also handle any long-distance rental properties you may own, including calling repairmen and collecting rent. Property managers are there to make your life as a landlord easier and give you peace of mind.
Pros of Property Management
Property managers can save you a lot of time and energy and can help you avoid legal trouble. Property managers have the knowledge and resources necessary to handle typical landlord issues that you may not have. If a tenant has an issue in the middle of the night or they have an amenity that needs immediate fixing, a property manager can get into contact with the necessary people. They’ll also screen tenants, handle marketing, and collect rent, which minimizes the stress and effort landlords go through.
Additionally, hiring a property manager means that a lot of the legal onus is taken off your shoulders. Property managers are trained with the legal knowledge necessary to keep a rental property running smoothly. That means that they’ll put security deposits in the right place, ensure the screening process complies with Fair Housing Laws, and handle any other legal documents or processes necessary. You also won’t have to deal with any unruly tenants or handle awkward situations that you would normally have to if you were self-managing.
Cons of Property Management
The biggest downside to hiring a property manager is the cost. On top of all the other fees you have to pay, you’ll have to set aside money to pay the property manager. These fees can fluctuate depending on how much you require of the property manager and the tasks you want them to handle.
Additionally, property managers are people, so you run the risk of dealing with someone you may not get along with or who won’t do the job to your standards. Your investment is likely very important to you, and landlords want a property manager who’s just as excited and dedicated as they are. To avoid a poor fit, you can interview property managers before you hire one.
Lastly, if building a relationship with your tenants is important to you, you likely won’t be able to form that relationship. This is because property managers deal with your tenants’ complaints and other issues. And if a property manager isn’t kind or responsible, tenants may blame that on you and possibly leave a bad review.
Which One Is Better?
When it comes to deciding which one is better, there is not one answer. The better option depends entirely on your needs and what suits you best. Self-management is great for landlords who have the know-how, time, and dedication to run a rental property. However, if that is simply too much responsibility, you’ll likely need a property manager to handle the day-to-day. Either choice comes with its pros, cons, and risks, but the important thing is to stay educated and aware.
Now that you know the differences between self-management and property management and which one is better for you, you’re better prepared to tackle your career as a landlord. Learning everything there is to know about being a landlord is the first step to running a successful rental business and becoming your own boss. Luckily, if you need any help, Excalibur Homes has a Georgia property management company with dedicated employees who are determined to make your life as a landlord run smoother.
