Everyone who owns an investment rental property has to face a decision: manage the property themselves, or hire a property management firm. There are lots of variables to consider, so we thought we’d put together this list of questions that might help you decide:
Do you want to deal with tenants on a day to day basis?
A large part of managing a rental property is dealing with tenants on a day-to-day basis. Here is a short list of some of the ongoing responsibilities you’ll be facing: marketing your empty rental, conducting credit checks and screening prospective tenants, drawing up leases, collecting rents, dealing with late payments, handling complaints from tenants, facilitating move-ins and move-outs, and in worst-case scenarios – conducting evictions.
It may sound overwhelming if you’re not experienced in managing a rental property! Truly, it can be a full-time job, especially if you own more than one rental property.
Are you armed with the legal knowledge needed to manage a rental property?
Quite often, we encounter landlords who don’t take this one seriously. It’s not an exaggeration to say that there are mountains of laws and regulations, at both a local and national level, that you will be required to abide by. It’s critically important to understand tenants’ rights; many people can end up violating fair housing law without even realizing, or meaning to!
How far away do you live from your rental property?
Unfortunately, you won’t be able to control when a tenant has a problem with your rental property. Issues happen at the most inconvenient times! That means you need to be ready and able to travel to your rental at any given time.
If you have a full-time job, consider how flexible it is and if it will allow you to head over to your rental at a moment’s notice. If you live further than two hours from your rental property, we encourage you to seriously consider using a property management firm. Travel time requiring more than a few hours can become problematic quickly, and most likely will add a level of stress and expense that you probably won’t want to bear.
Do you want to commit time to doing repairs and maintenance?
Are you ready to be on call 24/7? Holidays and weekends? Repairs and maintenance items will be a standard part of owning an investment property. If your rental home is newer, you may not have a lot of repairs, but you never know.
All homes need maintenance, some more than others! Be prepared for weekly/monthly/seasonal maintenance: this can mean winterizing sprinklers, cleaning gutters, lawn maintenance, etc. If you are a homeowner, consider how much work it will take to it twice: once on your own home, and once on your rental home (if you only own one). Owning multiple rental properties obviously increases the time needed accordingly.
Do you need a buffer between you and the tenants?
Maintaining professionalism as a landlord is key to happy tenants. Getting too personally involved is a recipe for disaster. Here’s why: it can cause you to be too lenient on some things, and that will cost you money. Or, it can cause you to be too defensive, which can alienate tenants. Remember, renting out a property is business. If you have any qualms about your ability to keep it on a strictly professional level, it’s best to hand off responsibility to a property manager who will be sure to keep things professional.
Can you afford to hire a property manager?
Okay, this is kind of a trick question. Really the question is: can you afford not to? Yes, there are fees involved with hiring a property management company, just like any service. But, what most people don’t realize is that property managers can actually make you more money in the long term. You will likely see better care of the property, better tenant selection, and get tenants who stay longer. Plus, your free time is not taken up, and you won’t sacrifice your time or health for your rental property.