Managing Your Own Rental Property As Opposed To Hiring A Property Manager

When you are planning on buying a rental property you have to decide whether or not you need to hire a property management company. If you are going to be a long-distance landlord, property management is a good idea because it could save you from going through some very unpleasant situations. Managing remotely can be done but it does require a good deal of dedication and planning.

If the property is located near your home you need to decide if you are willing to give up some nice cash flow you would receive if you were managing the property yourself in exchange for freeing up your time by not having to deal with tenants. However, it does not have to be an all or nothing deal. You could use a property management company to find your tenants and to handle the bond details and then do the rest of the managing yourself. Or you could hire a company to just collect rent for you and then do everything else yourself.

If you do decide to go it alone, you need to look at your tenants as your customers. You must be aware of the fact that your tenants may not be as mindful regarding the use and care of your property as you are. Therefore you should have full insurance coverage on the building and contents that are yours such as the appliances and furniture you may be allowing your tenants to use. Rental protection insurance is also a good thing to have in case your tenants stop paying their rent or there ends up being a vacancy for a long period of time.

Property managers are either registered real estate sales reps or registered property managers. If you do decide to use a property manager be sure to ask to look through the company's portfolio so you can see what types of properties it manages. Check the fees charged, how often properties are inspected and the company's overall approach to managing.

You will have to pay a (tax deductible) "letting" fee to hire a property management company to find tenants and deal with the bond. If you use a company only for managing the property and/or collecting rent, there will also be a fee to pay. If you decide to hire a property management company to handle everything you can expect to receive quite a few services which includes but are not limited to: choosing tenants, collecting rent, inspecting the property, paying utility bills and attending court on your behalf for any tenant disputes that may arise.

The deciding factors in this situation may be the amount of time you have available to spend dealing with the property, the amount of stress you can handle and how much you are willing to sacrifice in order to maximize your profits.


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