Are You Considering Self-Managing Your Property? Read This First
“A man who is his own property manager has a fool for his client.”
These words might sound harsh, but they’re worth mulling over as it can save you a lot of pain and aggravation in the long run, when considering self-managing your property.
Any homeowner or investor, without a real estate license or any real estate or property manager knowledge or experience, can manage his or her own property with a tenant involved.
While this is a right afforded to anyone who owns property, state and federal legalities are complex, and the task can be challenging even for those who are licensed and who have knowledge and experience in this realm.
For those who have neither the education nor the experience, dealing with tenants and the law can prove to be a daunting task that causes a lot of stress and takes up a lot of time.
So, indeed, you can manage your own property, but you might find it is simply not worth it when you consider all the factors.
HOWEVER, don’t take my advice right away. If you are interested in trying your hand at it and if you can afford the time, energy, money of the learning process, then nothing can stop you from going for it.
If you don’t have the luxury of time for a learning curve and extra cash, then choosing the right property management company is a decision that will allow you to have peace of mind while giving you the reassurance that you are charting the very best course for yourself and your investment.
One of the first questions we ask a homeowner when they are inquiring about our Rental Partners’ property management services, is:
“Is this the first time you will have been a landlord?” (meaning, they’ve never done this before) OR “Have you been managing this property for a while? And if so, what are you not satisfied with in the way it is currently being handled?”
The answers to these questions help us decipher how experienced the client is and that gives us the opportunity to educate him/her on what to expect throughout the year.
Here are a couple of reasons as to why using property management over self-management can be preferable.
1. Finding The Proper Tenant:
Everyone wants to know that their rental property is being taken care of by the right tenants and that the rent will be paid on time. Truth be told, not even the most caring and best property management company on the planet can guarantee that the tenant placed will not fall on hard times and have to be evicted or that the tenant will not turn into the next crazy person who will show up on the 6:00 o’clock news next week.
However, being familiar with, and properly reading background checks, credit checks, rental verification forms and employment letters can help to reduce these risks drastically.
The application process contributes to reducing the possibility of a tenant destroying your asset or having to be evicted during his/her tenancy. The undesirable tenant often preys on DIY landlords with loose applications and leases as well as careless move-in and move-out procedures. These things alone will provide them with enough ammunition for a judge to rule in their favor and to possibly see you as a slum landlord. Avoid this by having a solid application process, tenant screening process and tight-knit contract.
2. Late Rent:
Property Managers deal with sob stories about late rent, NOT YOU!
Let’s face it, you are now a business, selling a product (your house) for a fee (rent) and in return, you can then pay your suppliers (your mortgage company) on time.
We’ve all been in the situation when a tenant comes in late with their rent. Usually, it comes with the story behind it too. And it’s a story that will tug at your heart strings.
Whether the late rent is because their job has not processed their paycheck yet, they were sick, or that they were out of town, these are all just excuses for late rent.
If your bank has a system of setting a date when your mortgage is due and assessing steep late fees when your mortgage payment is late, then why not have the same strict system in place for a tenant?
A good property management company, like Rental Partners, will have covered this during the move in, within the original lease and reinforced it through monthly emails and direct deposit programs that the tenant could participate in.
Here at Rental Partners, we also don’t want you to have to listen to those excuses and problems. We make it a goal to figure out the problem with the tenant and fix it as soon as possible so that you can enjoy being a landlord without the stress that comes along with it.
3. Landlord/Tenant Laws:
There are more landlord/tenants laws than you would think.
When you self-manage, you will not know about all of the landlord/tenant laws that deal with discrimination, lease cancellation, notice of entry, deposit disbursements, entry of premises, collection of rents, partial payments, promises to pay, 7-day notices, landlord responsibilities, tenant rights, etc.
When you are not familiar these laws, it is easier to fall into a lawsuit and not know how to get yourself out. Staying compliant with shifting housing laws is a daunting task. These include state, local and federal regulations, as well as fair housing requirements (such as the ADA and HUD housing). While all housing regulations are important, Fair Housing will get a time-strapped, non-educated landlord into trouble every time.
4. Less Cost On Maintenance Repairs
Being a medium to large sized property management company allows deeper concessions on repairs and maintenance. Good, solid working relationships with vendors produce happy relationships with tenants and homeowners. The result usually leads to longer tenancy, fewer vacancies, and more money in your pocket.
Having an attentive property manager that repairs legitimate items promptly is something that a good property management company, like Rental Partners does not take for granted.
Knowledge as to what could be causing a leak in the 1st-floor kitchen ceiling helps to determine what technician to send out. And all technicians that enter a property should have already been vetted (meaning workmanship has been qualified, liability insurance has been provided and workman’s comp information has been collected and is still up to date).
Would a typical homeowner have time to do this as a tenant is screaming on the phone because smelly water is overflowing from their kitchen drain onto the new wood floor that was just installed? Probably not. But establishing a good network of home maintenance suppliers, subs and contractors is what a good property management company does best.
5. Second Job, New Career?
Having been in the real estate profession for over 20 years, I have yet to hear anyone say when they were looking to rent out their home or invest in real estate to increase their wealth that it was because they were looking for a second job.
However, when you are the landlord, that is essentially what you are signing yourself up for. There’s a lot on your plate when you are the landlord. Not only will you be remodeling the property (painting, tile, lawn, plumbing, electrical, etc.) every time a tenant moves in or out, you will also be working with the…
- Qualifying the prospective tenants
- Showing up for all appointments
- Screening all of the calls
- Creating leases,
- Providing move-in condition forms
- Processing deposit disbursements
- Dealing with all maintenance issues
- Being the on-call emergency contact
- Posting all compliance notices…
…the list continues.
In your spare time, you will be catching up with the landlord/tenant laws by reading through federal, local and state jargon.
If that does not sound appealing to you, then you might consider hiring a property management company. When you have someone else listening to the complaints, excuses, and day-to-day problems, it will reduce your daily stress and provide an inner peace that only a previous DIY landlord will be able to understand completely.
Give Rental Partners a call today at (904.701.3276) to find out if we are the right property manager for you. Or, leave us a message!
By: Christina Starmer