Picking the right property management solution for you can be frustrating. While it’s tempting for many to manage the property themselves to save money, others will choose to hire someone to do it for them. And even when you do hire them, there are lots of companies vying for your business.
There’s also the issue of how the property is managed. Is it with old-fashioned spreadsheets? Or is a more sophisticated rental property software program used?
Here we’ll look at each solution to help you determine the best fit for your goals.
The Do it Yourself Property Management Solutions
Most new landlords choose to go this route. That’s not a bad idea, as it helps them learn the business and understand what to expect as time goes on. If you fix many of the problems around the home yourself, this option is definitely the best one. Why hire someone just to tell you when something breaks? The tenant can (and will) do that themselves.
The main reason landlords choose this route is to save money. Property managers typically ask for 10% of the monthly rent, or a set fee like $99/month. Even if that doesn’t sound like much, $99 getting re-invested in the property can do a lot of good things over time. Especially if you use it to pay down the mortgage principle faster.
There are a few downsides, however. For one thing, you are responsible for EVERYTHING.
- Marketing the property
- Finding and screening suitable tenants
- Managing all paperwork (like the rental contract)
- Learning local rental laws
- Maintaining the property (from keeping the lawn mowed to fixing the HVAC when it breaks)
- Working with tenants on renewing the contract, or fixing minor issues when they leave
In other words, it’s a lot of work! If you plan on having several properties in your portfolio, you see how quickly this additional work can add up.
Granted, you may be in a position that allows you to spend this extra time on your property. But if you’re working a full-time job and have a family, spending your extra time managing properties probably isn’t your idea of fun.
The Other Property Management Solution
If you’re looking to become the next Donald Trump (and I’m not talking about running for president of the United States,) you’ll want a property management team to help you out. It’s just too much for one person to manage more than a few properties unless they have a lot of extra time on their hands.
…and if you’re one of those people in this day and age, let’s get coffee sometime. I’m curious how you manage it!
Anyways, a good property manager is worth their weight in gold. They deal with everything related to tenants, from the great experiences (loving the property and taking good care of it) to the bad (cleaning/replacing carpet the tenant’s dog destroyed.) No more late night calls of something leaking or breaking anymore- instead, you can focus your attention and time on something else.
Like, investing in more property?
Because property managers do this 40+ hours a week, they’re also probably able to do it better than you. They may not care about the property quite as much as you do, but a good one will try to take care of it as if it’s their property. They realize that as long as you the landlord are happy, you will keep using their valuable services!
The only real downside is that pesky management fee. And if you’re paying 10% on a home that rents for $2,500 a month, that $250 you’re losing isn’t chump change. That’s $3,000 a YEAR.
But again, you have to put a value on your time. Do you really want to be spending all of those extra hours managing the property? If it saves you 5 hours a month, that’s half a workday you can put into more important things like your family, investing in other properties or your health.
So… What’s the Best Property Management Solution for You?
Again, it just depends. If you love working around the house and don’t mind getting your hands dirty, managing properties yourself makes a lot of sense. But if you want to scale up or avoid spending too much time on your investments, a great property manager will be worth the price, just like great attorneys and accountants.