Compare DIY property management vs. hiring a property manager. Discover the costs, time, and control involved to decide the best approach for your rental property.
Deciding whether to manage your rental property yourself or hire a property management company is a crucial choice for landlords. Each option has its own costs, responsibilities, and benefits, and understanding these differences can help you make an informed decision. This guide will compare DIY property management with hiring a property manager, focusing on the time commitment, cost, control, and potential challenges of each approach.
Managing a rental property yourself can help you save money, as you won’t need to pay property management fees. However, there are still costs involved, such as advertising for tenants, conducting background checks, and purchasing supplies for maintenance. While DIY management eliminates the monthly property management fee, unexpected costs can add up if you need to hire professionals for certain repairs or legal issues.
Hiring a property management company comes with a cost, typically ranging from 8% to 12% of your monthly rental income. While this fee can impact your overall profit, it also means that professionals are handling the day-to-day management of your property, which can save you time and reduce stress. A property manager may also have established relationships with maintenance professionals, which can lead to cost savings on repairs.
Tip: Consider whether the potential time savings and reduced stress are worth the property management fees when making your decision.
Managing a property on your own requires a significant time commitment. From advertising the property and screening tenants to handling maintenance requests and collecting rent, being a landlord can be a full-time job. For landlords with multiple properties or other full-time commitments, DIY management may become overwhelming. Check out our first-time land lord tips article, which has a practical checklist for success.
A property manager takes on most of the day-to-day responsibilities, including finding tenants, handling maintenance, and managing tenant relations. This frees up your time and allows you to focus on other priorities, such as growing your real estate portfolio or spending time with family. For those with busy schedules, hiring a property manager can be a practical solution to reduce the time burden of property management.
Tip: If you value your time and prefer a more passive investment, hiring a property manager may be the better choice.
One of the major benefits of managing a property yourself is the level of control you have. You can personally select tenants, set rental prices, and decide how to handle maintenance and improvements. This hands-on approach can be beneficial if you want to be actively involved in every aspect of your rental property.
Hiring a property manager means relinquishing some control over the day-to-day operations of your property. While you still make major decisions, such as approving rental prices or large repairs, the property manager will handle the smaller details. This can be an advantage if you prefer not to deal with tenant issues or maintenance concerns, but it may be a drawback for those who want full control over their investment.
Tip: If maintaining control is important to you, DIY management may be the better fit. If you prefer a hands-off approach, a property manager can handle the details.
Managing a rental property yourself allows you to build personal relationships with your tenants. This can lead to a positive landlord-tenant relationship, where tenants feel more comfortable reaching out with concerns or maintenance requests. However, this also means you’ll be directly involved in handling tenant disputes, late rent payments, and other issues, which can be stressful.
A property manager serves as an intermediary between you and your tenants, handling communication and any tenant-related issues that arise. This can be especially helpful if you’re uncomfortable with conflict or prefer not to have direct interaction with tenants. A property manager’s experience in handling tenant relations can also lead to more efficient conflict resolution.
Tip: If you enjoy interacting with tenants and want to foster a community feel, DIY management may be more rewarding. If you prefer not to handle tenant issues directly, hiring a property manager can help.
As a DIY landlord, you are responsible for all maintenance and repairs. This can range from fixing minor issues, such as leaky faucets, to coordinating with contractors for major repairs. While managing maintenance yourself can save money, it can also be time-consuming and challenging, particularly if you lack experience in property maintenance.
A property management company typically has a network of reliable contractors and maintenance professionals, which can lead to faster and potentially less expensive repairs. Property managers also handle maintenance requests from tenants, ensuring that issues are addressed promptly. This can lead to higher tenant satisfaction and potentially longer lease agreements.
Tip: If you have experience with maintenance and enjoy hands-on work, DIY management could be a good fit. If you prefer not to deal with maintenance, a property manager can handle it for you.
Deciding between DIY property management and hiring a property manager depends on your goals, time availability, and comfort level with managing tenant relations and maintenance. DIY management offers cost savings and full control, but it requires a significant time commitment and the ability to handle various challenges. Hiring a property manager, on the other hand, comes with additional costs but provides convenience, time savings, and professional expertise. Evaluating your personal circumstances and investment goals will help you determine which approach is the best fit for you. If you decide to take the next step and become a landlord, here is an article with a free property management checklist for you to download: Property Management Checklist: A Practical Guide for Landlords
If you’re looking for a more passive way to invest in real estate without the challenges of direct property management, consider fractional real estate investing through platforms like Realbricks. Enjoy the benefits of real estate investing without the stress of day-to-day property management.
Disclaimer: Investing in real estate involves risks, including the potential loss of capital. This content is for informational purposes only and is not intended as investment advice. Investors should perform their own research and consult with financial professionals before making investment decisions.
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