Whether you have made an intentional choice to buy an investment property or you are preparing to rent out a home you inherited or once lived in, you’ll have to decide whether you’re going to manage it on your own or hire a professional management company to take care of it. Deciding what’s best for you depends on the amount of time you have as well as your experience with the rental market. You’ll also need the right temperament because a landlord/tenant relationship can sometimes be tricky.
Management Fees and Service Level
A lot of landlords choose to self-manage because they don’t want to pay a management fee. However, professional property management can actually help you earn more and spend less on your rental property. Your vacancy time is likely to be lower because a good property manager will get a good tenant in place quickly. You’ll earn more rent because a property manager will use market data and local comparables to price your property correctly. There’s less of a risk that you’ll lose money on property damage or evictions when a property manager places a tenant.
Ultimately, you’ll save money with better management. There are a lot of opportunities to make mistakes as a self-managing landlord, and those mistakes are usually expensive. Before you stress about the management fee, think about the value and the expertise you’re receiving in return.
Legal Issues and Liability
One area that makes professional property management invaluable is liability. While renting out a home can be lucrative and profitable, it can also put you at risk. Unless you have an in-depth knowledge of the Fair Housing Act and the local and state fair housing laws, you can easily violate one of them and face a discrimination claim for thousands of dollars. You could make the mistake of charging a tenant with a service animal a pet deposit. If you don’t know the security deposit law in California or the proper steps to take when you’re evicting a tenant, you could find yourself in a lot of legal trouble.
There’s also liability when it comes to maintenance and habitability issues. You need to have a lease that’s specific to California and you need to keep your eye on the rent control laws that are popping up all over the state. It’s hard to keep up with all of these laws as a self-managing landlord.
Tenant Relationships and Responsiveness
A property manager can be a valuable buffer between you and your tenant. We know a lot of self-managing landlords who make the mistake of becoming too friendly with their tenants. This can make it difficult to enforce the lease and collect the rent on time. You want to develop and maintain a respectful, professional relationship with your tenants, but don’t let the management experience become too emotional. A property manager will treat this like a business.
You also need to be responsive. If you want to be the person the tenant calls in the middle of the night when a leak begins flooding the house or a tree falls onto the roof, you can probably self-manage pretty effectively. If you know you won’t be able to respond to that call, use a property manager.
We’d love to tell you more about what we can do for you so contact us at Bell Properties, Inc. Many of our clients were once self-managing landlords, and they quickly learned that they could earn more and spend less on their investments with the help of professional management. They also earned a lot of their time back and increased their peace of mind.