“Property management is, undoubtedly, the make-or-break factor in real estate investing.”
– Jim Moody
We tell our clients or to anyone who’d listen:
Rental properties are excellent investment opportunities.
And if you own a rental property or planning to invest in one, then you can enjoy a healthy rental cash flow each month.
Imagine getting that “Your account has been credited xxx” message each month just by investing in a rental property.
And the best thing? The value of your real estate property won’t go down in the next few years.
Instead, it’ll go all the way up.
The longer you hold, the more you get.
But, as good as investing in a rental property sounds, being a landlord isn’t easy. Dealing with the tenants, scheduling regular maintenance, managing your property won’t be easy.
Unless, you hire a professional property management company to make things easier for you.
You’ll obviously have to subscribe to one of their plans or pay their one-time fees, but you will be making things much easier for you.
While that’s the easy way to handle things, some property investors prefer doing it the old-fashioned way, i.e. self-managing the property.
So, which one is the better option?
Let’s have a look.
Self-Management
Here, not only will you be responsible for managing your property, but you will also have to deal with the day-to-day operations all by yourself.
Pros
Following are the pros of self-managing your residential real estate property:
- More Control: If you like more control in your hands, then you can go all the way in and do it all by yourself. You’ll have more control over the day-to-day operations. Also, you will be responsible for making the important decisions.
- Closer Relationship with the Tenants: While doing it all by yourself, you will be the one responsible for dealing with the tenants. You’ll be the point of contact and not the property manager. So, you can handle all their issues, build a close relationship with them, as per your needs.
- Financial Savings: Also, you won’t have to give a cut of your rental cheque to the property management company. You’ll be keeping all of it. You won’t have to subscribe to one of their plans or pay for their services.
Cons
Following are the cons of self-managing your residential real estate property:
- Time-Consuming: Property management is time-consuming. You’ll be going at it all by yourself. You’ll have to spend your valuable time listening to your tenants’ problems, resolve their issues and God forbid, if they don’t pay their rent on time, you will have to spend time chasing them for rent.
- Lack of Expertise: While property managers are experts, chances are that you may not be familiar with property management, which might make handling things harder for you.
- Higher Stress: Tenant issues? Maintenance problems? You’ll never know when your stress level blows through the roof. Being a landlord is stressful. So, become one only if you are ready to deal with all of that stress.
Hiring a Property Management Company
A property management company will appoint a property manager to deal with the day-to-day responsibilities and manage your real estate property on your behalf.
Pros
- More Time: You won’t have to deal with the daily problems and tenant issues or anything else. All you will have to do is receive that monthly rental income from tenants. In return, you can shift your focus on your full-time venture or spending time with your friends and families. No need to head over to your rental property on a Sunday afternoon to fix that leaking pipe.
- Experts will be Managing Your Property: Your property will be handled by expert(s). So, you won’t have to worry about anything at all, as the ones you are hiring will know how to deal with any or every issue without having to worry you about anything.
- Ease of Filling Vacancies: Property management companies have their own networks and they’d love nothing more than helping you fill your vacancies.
Cons
- Paying a Certain Fee out of Your Monthly Rental Income: You’ll have to pay the property management company’s monthly service fee or a fixed-package or a fixed commission fee that they will cut out of your rental income in exchange for their services.
Conclusion
Here’s a popular saying:
“A great property manager is the key to
success in the real estate field.”
– Robert Kiyosaki
So, if you intend to do it all by yourself or hire a property management company to act on your behalf, make sure that you are making the right decision, as your success in the real estate field heavily depends on it.
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