Should you manage your investment properties yourself or hire a professional property management company? It’s one of the stickiest decisions real estate investors face.
While there is not a one-size-fits-all answer there are a few advantages and disadvantages of each method.
If you decide to go the self-management route, the biggest and most obvious advantage is that you can save money on management fees each month. You can also save money by avoiding price markups that most property management companies put on the repairs they supervise. Finally, you can establish a personal relationship with your Tenants that, with proper boundaries, can help you retain your Tenants longer.
On the other hand, self-management does present some challenges. You will need to handle your own rent collection, keep accurate accounting and coordinate repairs on short notice. Plus you will need to handle move-ins and move-outs. This requires you to be organized and can be quite time-consuming.
Also, property management companies get preferred access and pricing from vendors due to economies of scale that’s not usually available to individual investors. Finally, while having a personal relationship with your Tenant can be positive, it can also lead to negative outcomes if the investor is not skilled in people management. For instance, the Tenant could take advantage of the investor’s kindness and flexibility to fall behind on their obligations without consequences. Or the lack of people skills can cause the investor to push away a great Tenant and cause an unnecessary turnover that wouldn’t have happened if a professional were managing the property.
There are a few questions you should consider as you make your decision:
- How much time can you realistically dedicate to the management of your properties given your current schedule? Given the amount of time spent vs money saved, is that good enough compensation for your time?
- Will you be able to set aside time each month to keep accurate accounting and make sure all rents are collected and up to date?
- Do you have access to a team of reliable and affordable vendors for HVAC, roofing, plumbing, electrical, flooring, painting and handyman type repairs?
- Are you able to promptly respond to tenant repair requests given your work schedule?
- Are you able to perform property inspections at least annually (or semi-annually)?
- How would you rate your people skills – the ability to be fair but firm, friendly but with the right boundaries in place?
- Do you want to spend your time performing property management duties – what is your time worth?
- Should it come to that, do you have a go-to attorney to handle your evictions or do you have the time to handle it yourself?
If the answer to the overwhelming majority of those questions is yes, then you should probably self-manage. If not, you would be best served by working with a professional property management company that understands and caters to your investment.
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If you are looking for an investor-friendly property management company for your Greater Houston rentals, we got you covered: Get in touch at http://signaturehoustonpm.com
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