Everyone knows that real estate is one of the best investments a person can make, but there is less of a consensus regarding how to go about it. One of the biggest choices you will have to make will be whether you will manage the property yourself or hire a company to do it for you.
Here are the pros and cons for each option that you need to know about.
Pros of Hiring a Management Company
Less Hassle, More Convenience
The biggest reason that landlords hire property management companies is to make their lives easier. These companies take care of everything from collecting rent to handling complaints to even pursuing evictions if necessary. Many people choose to hire this type of company when they view their property strictly as an investment or revenue stream and don’t want to deal with any of the day to day management.
If you own many properties, live far away, or don’t want to deal with the day to day stress of management, then hiring a company like Sterling Woodrow could be the perfect move for you.
Cons of Hiring a Management Company
Hiring a management company certainly does eat into your profits. Most companies will charge somewhere between 5% and 10% of the money you make in rent.
If you want to make as much money as possible from your property, then you may want to consider running it yourself. However, if hiring a company helps you to acquire more properties, then it may not be too difficult for you to offset the cost of a property manager.
When you put a property management company in control, you lose a lot of power in how your properties are run. If you hire a subpar company, then it could severely hurt your profits if the tenants’ experiences are poor.
Pros of Managing Yourself
Build Tenant Relationships
When you manage your property yourself, you can meet your tenants and get to know them. Establishing rapport with your tenants might convince them to rent from you longer or tell their friends about the property leading to more business.
Pocket All Rent Income
When you manage properties on your own, you don’t owe any fees to anyone. If you only own a few properties, then running them on your own will be the best way to make the biggest bang for your buck. However, if you intend to own several properties or a large property with many tenants, then hiring a property manager may actually help you make more money.
Cons of Managing Yourself
If you have an occupation other than managing your property, then it may be complicated at times to do both. Tenants can call you at any time with emergencies you will have to deal with, which is not always convenient. Additionally, you can’t be in two places at once, so owning multiple investment properties can be extremely challenging.
Make the Best Decision For Your Business and Lifestyle
There is no right or wrong answer when it comes to how to manage your investment property. You must assess all your options and choose the one that works best for your specific situation.
Rather than hiring a property management company, you could hire a resident manager who will help you run things without being as expensive. However, this method will likely only be useful if you have few properties and you are comfortable dealing with payroll and taxes. Most property owners decide to invest in extra help from a management company – it is worth the extra expense!