Property management can be challenging in locations with high rental property demand, like the Detroit metropolitan area. However, hiring a local expert and handing over all your tasks can make it easier. Many property owners still choose to manage their properties themselves to save money or have better control, even though it can be stressful.
If you are unsure about maintaining your property through self-management vs. property manager, let’s help you.
Read the rest, learn the key differences between these two property management systems, and make the best choice for your situation.
Self-Management vs. Property Manager: A Quick Comparison
Here is a comparison table of self-management vs. property manager you can check out to make your decision easier:
Feature | Self-Management | Property Manager |
Cost | Minimal upfront cost. | Depends on services and management coverage. |
Time Commitment | Significant time investment | Minimal time investment |
Expertise | Limited expertise | Extensive expertise |
Stress Level | High-stress | Low-stress |
Renters Relations | Can be challenging. | Experienced in handling renters relations. |
Maintenance | Can be time-consuming and costly | Handles maintenance efficiently. |
Legal Compliance | Can be complex | Ensures legal compliance |
Emergency Response | May be slow | Provides immediate emergency response |
What Is Self-Management for Rental Properties?
Self-management of properties is the DIY approach. Rather than hiring a property manager, you will manage your property and complete all the tasks they do for you.
You will be involved in all aspects, from marketing and resident screening to property maintenance. According to a survey, up to 45% of landlords manage their property, and another study shows that over 50% of owners regard this task as their full-time job.
Though it seems easier, it is not for everyone. As it involves lots of work, it may not be successful for some. Still, you will get complete control over your property, which sometimes increases your profit margin and cash flow.
The Pros and Cons of Self-Managing Your Property
More and more people prefer to self-manage their property due to various personal benefits. However, there are some drawbacks as well. Let’s discuss all of them:
Advantages
Some of the notable advantages you may experience in your self-managed property:
1. Closer Renter Relationship
A closer relationship with your property residents is the key advantage here. A survey shows that 48.7% of landlords ask their residents to leave before the agreement ends because they have trouble meeting the conditions.
Self-managed rental property resolves the issue effectively. You can directly connect with them when you manage everything on your own. They can reach out to you with their problems, and you can also fix things faster.
2. Direct Control
You have direct control over your property. You can screen applications, interview them, and choose the best resident for your property. It also results in better-managed properties as you schedule regular inspections and repair any needs. It means all work is done to your satisfaction.
3. Cost Savings
Through self-management, you can save money on property management fees. According to a survey, these fees typically range from 8–12% of the monthly rent. While this percentage may seem small, it can take away 20–30% of your profits.
4. Ensures Flexibility
By self-managing rental property, you can make your own decisions without waiting for approval from a property manager. For example, if a resident reports a broken heater in winter, you can quickly decide to fix it without needing approval. Thus, you can prevent problems from getting bigger and keep your residents happy.
Challenges
Take note of some of the challenges of self-managing a property from our experience:
- Time-Consuming: Self-managing rental property is nothing but a time-consuming aspect. You will be responsible for everything, from rent collection to handling renters’ issues.
- Maintenance and Repairs: When something malfunctions, like a faucet or a heater, you must fix it or find someone who can fix it. It can be stressful if you are in a hurry.
- Poor Resident Management: With a property manager, it is easier to choose the right renters and handle their problems.
- Chances of Lower ROI: There is a higher chance of you making mistakes while self-managing rental property, which can result in lower ROI.
What Does a Property Manager Do?
A property manager is an individual who is responsible for the day-to-day operation of your property. The goal of hiring a property manager is – to protect your real estate investment with professional help.
A property manager handles everything, from collecting rent and coordinating leases to following up on responses. They must also comply with laws regarding resident screening, evictions, and lease terminations.
The Pros and Cons of Hiring a Property Manager
Hiring a property manager can have a lot of advantages with minimal effort. Let’s discuss the required details:
Advantages
A property management company has long years of experience in managing property. Through their expertise, you will get the benefits of professional property management:
1. Easy and Stress-Free
The overall process will become far easier and stress-free. You don’t need to do anything, as all tasks are done professionally, just as you demand. There will be no resident issues you have to deal with.
You can focus on your own time and live with the assurance that you will be contacted only in emergencies. It overall saves you time and effort.
2. Proper Marketing and Advertising of Your Property
Property managers use effective marketing processes to advertise your property. For this, they use various advertising methods like online marketing, online building listings, social media marketing, hosting events, and so on.
It ensures proper promotion of your property and helps you reach potential renters. Besides, they have relationships with local real estate agents and realtors, which can refer good residents to your property. These things will be difficult for you to execute without such an elaborate marketing plan.
3. Managing Residents
A property manager can manage residents effectively. They ensure that all paperwork is well-maintained and that residents feel welcome to live there.
They collect rent, handle resident issues quickly, and perform maintenance and repairs professionally. In addition, they comply with local landlord-resident laws and help prevent any legal issues.
4. Managing Vendor Relationships
As a property manager, overseeing every aspect of the property is part of their daily routine. One other critical task for them is effective vendor management. They regularly communicate with vendors, quickly address issues, and give valuable insight to improve the work. It ensures your property’s proper functioning and leads to long-term success.
Drawbacks
Some drawbacks of hiring a property manager include:
- Expense: Hiring a property manager can be costly. Typically, they charge a specified percentage of your rent, which can cut into your profits.
- Lack of Involvement: When you hire a property manager, you will have less involvement in every task. They handle most of the day-to-day tasks, making it hard for you to make decisions or understand residents’ needs.
Self-Management vs. Property Manager: Which Should You Choose?
Finally, the time has come to make a decision. Self-managing a property can be a great choice if you have time and a good understanding of maintenance. Also, you should have strong communication skills and the ability to handle resident issues efficiently.
To avoid these hassles, hiring a property manager is the best choice. Especially if you are busy or have multiple properties and live far from them.
Buildium’s report says 63% of property owners now use property management services. It is up from 55% before the pandemic, showing a 12% increase in just a year.
In Closing
Property management is a vast sector in which perfect management is key. Otherwise, you can’t expect the best return on your investment, especially in locations like the Detroit metropolitan area, where market dynamics can be challenging.
Self-management vs. property manager – no surprise you are confused. However, it is always a good idea to hire a property manager. They know how to work with renters, understand the rules, and handle repairs. Thus, you can enjoy your investment without worrying about the daily tasks!
Frequently Asked Questions
How do property managers handle renter screening and selection?
Property managers screen renters by reviewing applications, checking backgrounds, and ensuring people can pay rent. They also talk to previous landlords to find good residents.
What are the potential risks of self-managing resident relationships?
Self-managing renters’ relationships can cause problems like conflicts, poor communication, legal issues, and wasted time. These risks can lead to late rent, disputes, and property damage.