Pros and cons of self managing vs hiring a property manager.

TL:DR

You have a spicy decision to make: should you hire a property manager (PM) to manage your rental or self manage?

It really comes down to two end results:

It costs less money to manage by yourself but costs more time.

It costs more money to hire a property manager but costs less time.

Essentially, do you want to have more money in your pocket or time in your day?

Now, let’s bust out the spicy pros and cons list for self managing.

PROS of self managing:

Save money by doing your own maintenance and hiring contractors of choice.

To be honest, it’s dang expensive to hire a contractor to do any amount of work on a home. Even a simple fix can ring up in the hundreds of dollars after labor and parts. Self managing allows you to save money by either doing the repairs yourself or finding a contractor you know and trust won’t price gouge. Some PMs have a preferred list of vendors you can’t stray from if, for example, they have a contract with them. Self managing gives back this freedom. Some PMs will give you the option to either make the repairs yourself or choose the vendor but this isn’t always the case. Total vendor freedom is yours if you self manage.

Direct contact with tenants allows for streamlined communication.

This one is actually a double edged sword depending on the type of person/landlord you are. If you enjoy this kind of personalized service it might suit you well to forge relationships and interact with renters. But if you struggle with efficient or timely communication, this can strain the landlord-renter relationship and make things worse.

More freedom and control overall.

It’s your rental and you run the show. All the shots are yours to call (Queue “Shots” by LMFAO).

Save money by not paying management fees.

Each PM is different but there will be some sort of fee(s) you’ll have to pay monthly or yearly to use their services. This will lower your ROI. However, if you decide to use a property manager you can shop around to see who has the best rates. Just make sure the quality of service is there – you get what you pay for!

CONS of self managing:

Self managing is utterly time consuming.

Especially if you have more than a few properties. You’ll need to be prepared to market your properties, screen applicants, sign leases and all paperwork involved, keep copies of all documents and financials, collect rent, follow up on lease violations, conduct inspections, and the list does NOT stop my dude. Those are just a few examples. Your organization skills must be top nacho!

You’re on call, all the time.

This goes hand in hand with self-management being time consuming. But since you run the show you’ll need to be prepared for renters to call with maintenance issues at 2am, on holidays, or whenever it’s not convenient for you and respond accordingly. Legally, you cannot let certain items go unresolved. Especially if it’s health and safety issue. You can be sued for not addressing certain situations in a timely manner.

You must be educated and well versed in tenant-landlord laws and fair housing practices.

There’s no winging it when it comes to the law and renter’s rights. You need to be aware AND compliant with housing laws, both federal and state. You’ll need to commit to learning all these things along with ongoing education as laws evolve. Nobody wants a spicy lawsuit.

You’re the one to enforce policies, lease violations, and rules.

You have to be comfortable with confrontation and letting the renter know when they are violating a lease stipulation, how they can remedy it, and following up to ensure it’s fixed. You will be policing the property and renter unless you want the property to suffer.

Be prepared to handle any and all legal matters.

Of course you can consult and implement a lawyer but you won’t have the third party go-between that a PM offers. You’ll be responsible for providing documentation, contacting the lawyer, attending meetings and calls, going to arbitrations and hearings, and whatever else is required of you.

Overall, you’ll want to consider all of these factors before deciding if self managing is the best fit for you. Your ROI expectations, personality, and skills should be considered when making this decision.

If after reading this you’re thinking it sounds like too much spicy work or you don’t have the time to invest, hop on over to this post: Pros and cons of hiring a property manager vs self managing.

Best of luck to you and your spicy self managing journey!