Property investors and small business owners are alike in the sense that they believe they can manage everything on their own. Sure, it’s possible, but is it the best use of time? What are the pros and cons of self-managing? What other projects or priorities can you be focusing on instead? If you’re wondering whether you should manage your own rental properties or seek professional help, here are some key questions to consider.
What goes into managing properties?
Property management is a lot more work than one might think, especially for a first-time investor. And for investors who are looking to grow their portfolios – is the amount of work required to self-manage sustainable at scale? Before you can answer, let’s assess what actually goes into managing rental properties:
- Vacancies – It can take days or even weeks to fill units between resident turnover or when acquiring new properties. You have to advertise the listing, respond to interested prospects, coordinate showings, and follow up on next steps.
- Leasing – The leasing process can get rather extensive as well. First, you’ve got to make sure you have all the right paperwork, and that your rental agreements contain the right legal language to stay compliant and protect your assets. Then, you have to organize the key exchange and provide welcome notices. And of course, you must inform residents of available resources and how to reach you in the case of any building issues.
- R&M – When the need for repair and maintenance arises, you not only have to source the right technicians, you also have to coordinate a date and time with residents to schedule the repair and follow up to ensure the job was done well.
- Evictions – These can get ugly and may require some legal intervention. If it does end up getting to that point, it can get quite pricey too.
- Compliance – Staying up-to-date with compliance laws can be a tough job in and of itself. There’s a lot to brush up on with local and state legislation, and not just on the property owner side either. It’s critical to understand regulations that pertain to residents as well, so you safeguard your investments and avoid any fees or penalties.
Do you have the time?
When you think about the finite amount of time you have in your day, how do you assign value to each hour? When you start thinking about what your time is worth, it’s amazing how much clarity you gain on how to best utilize your day. The sheer number of hours that go into every aspect of property management essentially amounts to a full-time job. It really depends on whether you are regarding property management as your profession, or if it’s meant to be a means of building wealth in a more passive way.
Does it make sense to?
When you think about your top skills or where your expertise lies, is property management a part of that picture? The art of property management requires professional undertaking. Amateurs can be successful, but it takes a specialist to understand how to scale services and maximize return on investment. On top of that, it’s necessary to be well-versed in local and state legislation and have relationships with attorneys to avoid fees and unnecessary legal battles should they ever materialize. Additionally, do you have connections to trusted vendors to ensure quality completion of R&M jobs and resolve resident requests quickly? Although it’s not absolutely critical to have these relationships, it certainly makes the business of managing properties far more efficient, and friendlier on your wallet to boot.
What’s the better alternative?
Think about this: How would your life change if you never had to worry about managing your own properties again? Property management professionals do this for a living for a reason.Working with a team of professionals who know how to operate skillfully in your particular geolocation can increase your return in ways you never thought possible.For more details, read our Self-Managing: What Is Your Time Worth? article.