The Benefits and Downsides of Self-Managing Your Rental Property
It is fairly easy to fall into the theory that upon the purchase of your very first rental property, the rest of your investment journey will go smoothly. You may even find yourself wondering: “How hard can it be to collect rent?”
If that’s where your mind is at, prepare for a rude awakening. There is a vast difference between ownership of a rental property and the management of your own rental property. Ownership is more passive, wherein your income just comes in steadily. Management of a rental property, however, goes far beyond the collection of rent.
Some people prefer to stay on the ownership end of things and hire professional property managers instead. Others choose to remain involved and go into self-management, similar to a “do it yourself landlord” situation.
Here are some of the benefits and downsides of self-managing your rental property.
Full control over the investment you made
Essentially, you are responsible for every little thing when you choose to self-manage your rental property. This includes handling the likes of maintenance, marketing, repairs, tenant management, and tenant screening. There will be no middleman or third party between you, your profit, and your tenants.
You will get to make decisions, sometimes on the spot, about what the best option for your business will be. At certain points, those choices will be able to bring you closer to your goals and objectives.
Learning opportunities and opportunities to gain experience abound
It will be much easier to grow your property investment the more you learn about it. Despite initial setbacks, you will eventually gain enough knowledge in the rental industry to make smarter choices. It will also sharpen your instincts and even the skills you use in the industry.
Property management fees are unnecessary
Usually, a property management company makes anywhere from 7 to 15 percent of the total rent income you make per month. Managing your own property means that you will be able to save that money either for profit or reinvestment back into your property.
It can be incredibly tough on several levels
Short of being unemployed otherwise or being a retiree, you will run into the difficulty of managing your investment property correctly. There are several tasks that require varying levels of attention and even physical effort. You could very well be overwhelmed not just in terms of running around, but also mentally, especially when bad tenants are involved.
Tenants might not be screened well enough
One of the key facets of self-managing your rental property includes screening tenants that could possibly occupy your space. Not having enough knowledge, experience, and especially resources could unfortunately lead to bad tenants.
Bad tenants are people who, among other things, don’t pay on time and are a nuisance to the other renters. Worse, they are not easy to reason with on any scale whenever an issue comes up.
Like most everything else, there are pros and cons to whether or not you will self-manage your rental property. However, if you do not have a lot of time or resources, there’s a chance you’ll be exhausted often. If this is the situation, it might be best to work with a property manager to oversee your rental property.
Looking for residential property management? Contact Quest Real Estate today! Our full-service real estate company has helped clients throughout Northeast Florida since 1985.