Earning a passive income from a property is not just a matter of buying a home and sitting down while you collect the rent each month. Managing a rental requires a lot of effort, ranging from maintenance to communications with tenants to the marketing of the property.
This can be difficult, especially if you have a portfolio of multiple properties, which is why many of them choose to seek the help of property managers.
However, some investors willingly accept the challenge. Self-management of a property can improve relationships with tenants and improve your social skills. It also helps you get more involved in different aspects of real estate investing. In fact, many investors have found themselves in professional property management.
In the long run, what is the most sustainable action? We break it down for you.
Why do you do it yourself?
The timeless adage says that when you want something to be done right, you always do it yourself. For some investors, this applies to the management of a property – it is, after all, your property and nobody knows it as well as you. No one cares as much as you do, because you bought it with your money.
A property manager also represents an additional expense compared to the many costs you incur when buying a property. You get what you pay with many property managers. Therefore, if you try to save in this area, you may end up with an inefficient administrator, which means you have to intervene yourself, which prevents you from hiring them.
You can also get great service, but you have to pay the high price. For an investor with a limited budget, especially a new investor, this option may not always be viable.
Managing your property leads you through a wide range of real estate investment process. You learn how to advertise renting sensibly via the right media; sort the tenants; negotiate terms and rates; and establish inspection schedules.
Maintaining good tenant relationships as a landlord and property manager can also inspire greater respect and camaraderie between the two parties, and it would be easier to keep good tenants in the long run.
Along the way, you become a better communicator, improve your relationship skills, expand your network of contacts in the sector and broaden your knowledge of the real estate market in general.
Indeed, a number of effective property managers have today started their careers by managing their own properties before extending to the properties of other investors once they 're become experts in the craft industry. Managing a property personally can be very difficult at first, but once you have found your balance, not only do you hold the fate of your wallet in your hands, but you may even find your personal call.
Why call on a property manager?
Not all investors are able to manage real estate, especially those with large portfolios or investments in different states. It is a process that can be costly in terms of money, time and effort, and for some, self-management expenses can far outweigh the benefits.
You may be able to go home at the end of a long day on the terrible news that your tenant needs urgent repair – or that a visitor's pet has severely damaged the property. ground; or worse, to know that your renter has gone drunk and left you with a gigantic mess to clean up. It can be very difficult to calmly deal with these problems, especially if you are not in a sincere mood.
"Most real estate portfolios are six- or seven-figure investments. You would like an experienced professional to manage it instead of leaving it to chance "
It's here that hiring a property manager is very helpful – you have someone who is equipped to handle problems like this, and you can relax and relax for the most part.
"Whether you have one or more properties in multiple states, it makes sense to hire professionals. I want someone who has the systems, processes and policies in place to handle everything that comes along, "says Victor Dong, blogger on The Frugal Samurai.
"Most real estate portfolios are six- or seven-figure investments. You would like an experienced professional to manage it instead of leaving it to chance. "
Although real estate managers cost money, Dong points out that in the end, the cost is not that important if we take it into account. count the time and effort needed to do it yourself.
"In my wallet, I calculated about $ 20 a week per property, which, after deducting taxes and comparing the number of hours I spend doing this DIY, is a evidence. "
Dong highlights as another positive point that the property manager does not own the property because it means that you have a calm and impartial representative who will be less inclined to react emotionally. For him, a good relationship between owner and owner of a property is adequate communication.
"If everything goes well, you expect minimal contact with your property manager. But there are certain times when strong communication is essential, "he explains.
"For example, if your property is advertised for rental, you should receive updates after each open viewing, as well as weekly comments on the progress of the rental campaign. In the event of a maintenance problem, you expect to be informed immediately of urgent problems. Non-essential issues are summarized in an email, preferably in quotation marks. "
A good property manager can do more than just manage your rental – it can be a great resource.
"Very good property managers will be an invaluable source of market information for setting rent when renewing leases, knowing what types of buildings tenants love or not, as well as the direction of the lease. rental market. You pay them, so use them! "
Ultimately, the choice between self-management and hiring a property manager depends on the quality of attention and effort you want to give your property. If you are able to engage in the rental process of a rental, DIY management may be the way to go: you do things the way you want, and you strengthen your life skills throughout the path. If you want a simpler investment experience and allowing you to focus on the acquisition, hiring a property manager might be the best solution.
