MANAGE YOUR OWN HOME?
One of the most frequent questions I hear from new investors is “Should I manage my home myself or should I hire a property manager?”.
Everyone knows that buying and owning rental properties is one of the best investments around. However, with any great investment comes risk and responsibility. Most property management companies will tell you that it is not possible to achieve the same results without hiring a property manager. That is not the case. There are plenty of investors that manage their own properties without issues. Others just don’t want the risk and responsibility of going it alone. Below you will find the top 5 things to consider when deciding whether to manage your own home.
The biggest consideration is time. Do you have a lot of extra time in your week to deal with all the responsibilities that come with managing a rental property? If you work a 40 hour per week job and have a family it could be very difficult to manage all the tasks that go along with renting your house. Most property managers will tell you they started a management company because managing their own properties became a full-time job. This can be very true. First time managers will tell you that it takes so much more time than they originally thought. If you are someone looking for a part-time job or just enjoy working a lot, then managing your own property might fit your personality and lifestyle just fine! Remember that there is so much more to it than collecting rent and it all takes time. Bookkeeping, qualifying tenants, inspections, maintenance, signing leases, renewals, and more.
One of the hardest things about managing the largest investment you will ever make is having objectivity. To manage your own home, you must now see it as an investment and nothing more. Most people form emotional attachments to their home which can make it very difficult to deal with someone else living in that space. Will you get upset when something breaks or if someone does not like the home? It is very common for property managers to have someone else in their company manage their own properties to keep this objectivity. It is a very difficult thing to have!
Will you be able to avoid making emotional decisions when selecting a tenant? We run a landlord rescue service for homeowners who get into trouble when renting out their own home. The number one thing they tell us is that they “believed” a sob story the tenant had to offer, or they “had a good feeling” about them. You must be able to make decisions based on prescribed systems and standards to ensure you get good tenants.
3. KNOWING THE LAW
Probably the most important thing to know when renting your house out is the law. To self-manage, you must be intimately familiar with state, local, and federal laws. There are several laws about what you can and can’t do, such as: How long do you have to respond to maintenance requests? When can you enter a property? What is considered an essential service? What can you deny an applicant for? These things are important to know before renting out your property yourself. This is where a property manager can come in handy if you don’t want to mess with all the rules and regulations. Pull up a copy of your local Landlord Tenant Law and read it. See if it is something you feel comfortable with enforcing AND following.
If these are things that you don’t mind dealing with then self-management may be for you. However, if you don’t feel like dealing with all the hassles and headaches of managing your own home then a property manager might be the way to go.