When you have a rental property, it’s natural to weigh the options when you’re deciding how to have it managed. You can hire a professional property manager, or you can do it yourself. When you hire someone, you typically pay that property manager a percentage of the rent you collect. In exchange for that fee, your property manager will provide services and tasks on your behalf. Managing your own property also has financial costs as well as other costs.
Property management takes a lot of time, and time is a large price you’ll have to pay. Taking care of your rental property will take up a part of your work day and the time you spend with family. It’s hard to do it well in your spare time only. You’ll need to show the vacant property and take the time to handle repairs and maintenance. Rusty pipes and service calls happen at unexpected and inconvenient times. You’ll also need to collect rent, chase down late rent and take care of all your detailed financial accounting.
There’s an emotional cost to managing your own property too. This cost is hard to quantify. There will be emergencies that cost a lot of emotional energy. You’ll need to deal with tenants and try to collect unpaid rent. Confronting tenants who may be late paying because of family struggles or legitimate financial problems can be difficult. You might have neighbors angry about what your tenants are doing or associations filing complaints against your property.
There is a heavy cost when it comes to risk and liability. You have to stay up to date on all fair housing laws and make sure you treat all tenants equally. When you do have unpaid rent, you may have to file for eviction. You have to do that properly or there will be an additional financial risk for you.
In addition to your time, emotional and liability costs, you’ll have actual financial costs when you manage your own property. There will be vendors to pay and usually you won’t get the discounted rate that property managers do because of their volume of work. Repairs can get expensive, especially when you do too much or too little. You might cost yourself money when rent isn’t paid or comes in late. That emotional involvement can cost you money. Professional property managers have standard operating procedures for rent collection and there are policies in place to follow. Pricing a vacant property can also be complicated when you are managing your own good. If you price your property too low, you’ll get a tenant quickly, but you could be losing a return on your investment. If you price your property too high, it will stay vacant on the market.
What Does it Cost to Self Manage My Memphis HomeThink about what your time and emotions are worth before you decide to self-manage your property. If you have any questions about the services a professional manager can provide, please contact us at Reed & Associates.