Key Takeaways
- Professional property managers handle critical responsibilities such as tenant screening, rent collection, maintenance coordination, legal compliance, and property marketing, helping owners streamline rental operations.
- Self-managing a rental property can save management fees, but it requires a significant investment of time, effort, and expertise to effectively handle tenant relations, maintenance, and regulatory requirements.
- Hiring a property management company provides access to industry knowledge, established processes, and trusted vendor networks, which can improve efficiency, reduce risk, and support long-term investment success.
As an investor in a rental property, you will face one of the biggest decisions you will have to make as a property owner: Do I hire a professional property manager or manage the property myself?
This is not just an operational decision; it’s a strategic one. It can impact how much money you make, how much of your time you spend managing the property, how much risk you take on as a property owner, and what it feels like to be a property owner.
While both managing a rental property and working with a property management company have their own unique set of pros and cons, the choice of which to utilize will vary based on the property owner’s individual circumstances, such as their goals, anticipated level of involvement, and available financial resources.
In this article, we at BridgeHaus Property Managers will give you a detailed comparison between hiring a property manager and managing the property yourself, so you will have enough information to make an informed decision about which option will best fit your individual situation.
The Role of a Property Manager
Property managers perform a broad spectrum of duties, including:
- Marketing and advertising for vacant rentals.
- Tenant screening/selection.
- Ensuring adherence to legal and regulatory requirements.
- Drafting and enforcing lease contracts.
- Rent collection and financial management.
- Organizing maintenance and repairs.
There are many benefits to having a professional manage your property for you. These benefits can be realized when you employ a property manager to help manage the day-to-day operation of your rental property.
A property manager is a licensed individual or company, that serves as the operational and administrative manager for your rental property. In addition, the property manager may also have some limited financial responsibilities for your rental property as well.
Expectations in Self-Management
With self-managed properties, you will have total responsibility for the property and everything associated with the operation of that property. This includes:
- Advertising vacancies.
- Property showings.
- Screening applicants.
- Maintenance and repair management.
- Tenant relations.
- Financial record keeping.
Things to Consider when Deciding
Here are some of the considerations you need to make before deciding whether to self-manage or hiring a professional:
Costs
When using property managers, normal service costs will generally include monthly fees, leasing/tenant placement fees, and additional charges for coordination of maintenance or any special services.
Although expenses associated with property management services will reduce net rental income and cash flow, they can provide convenience and a level of professional oversight that may not be attainable through self-management.
When property owners self-manage, they do not incur management fee expenses, resulting in the property owner retaining a higher percentage of rent. However, there can be indirect expenses for self-managed properties, including time spent managing the property, potential inefficiency in managing the property, and an increase in the likelihood of incurring an expense for a mistake.
Time Commitment
Using a property manager will result in significantly less time needed to be spent by a San Diego property owner than if that rental were to be managed by the owner themselves. External management of day-to-day operations allows owners to concentrate on more important items on their schedule.
Self-management takes a lot of time and can only be done if the owner has the energy and availability. For example, responding to tenant calls and emails, coordinating repairs, and completing administrative tasks can take time. Also, if unexpected situations arise (e.g., emergencies, disputes, etc.), the owner may need to act immediately, regardless of how busy they are.
Self-managing owners should evaluate whether they have enough time, energy, and resources to successfully manage their properties.
Expertise and Experience
A professional property management company possesses training and experience in many different fields, helping to increase the efficiency of property operations.
Here are some of the advantages of hiring a professional property management company:
- Knowledge of local, state, and federal laws and regulations related to rental properties.
- Established tenant-screening procedures.
- Experience with handling disputes and evictions.
- Access to reliable vendors and contractors.
An owner self-managing their properties has a responsibility to develop their own skillsets. This can be an extremely rewarding process. However, it does require time and effort to develop the necessary expertise.
Self-managing owners are required to invest in education and ongoing professional development to ensure that every step of the rental process is compliant to industry standards and local regulations.
Tenant Move-In and Lease Agreement
Property management professionals utilize standard procedures and documentation to facilitate tenant move-in and lease agreement execution:
- Credit report retrieval.
- Criminal background check.
- Rental history confirmation.
Property management professionals will have established processes that assist them in determining tenant risk potential and establishing a positive tenant rental history.
A self-managing landlord is responsible for the development of their tenant identification and selection process and must provide due diligence surrounding the identification and selection of tenants as they relate to their legal responsibilities.
Maintenance and Repairs
Most professional property managers have a network of contractors at their disposal so they can get repairs done quickly and inexpensively. They also help coordinate maintenance requests made by tenants and ensure they are turned around in a timely fashion.
Owners who self-manage must do all of the following activities themselves:
- Finding and hiring contractors for repair work.
- Negotiating prices with contractors.
- Managing and supervising contractors’ performance.
Bottom Line
The best investment strategy combines efficiency and your own personal priorities. Property owners can use the considerations described here to ensure that their decision-making is informed and supports their immediate goals as well as long-term success.
We strongly endorse the use of a property management firm as the greatest means of achieving sustainable success. Contact us today to learn about our services!
