The Pros and Cons of Self-Managing Your Rental Properties

For many property owners, the decision to self-manage rental properties offers both rewards and challenges. While the idea of maintaining complete control over your investment and saving on management fees is appealing, the reality of property management involves much more than simply collecting monthly rent. From handling 3 AM maintenance emergencies to navigating complex tenant relationships and legal requirements, self-management can quickly become overwhelming.

The choice between self-managing and hiring professional help often comes down to one question: Is the money saved worth the time invested? While managing your own properties can save you 4-12% in management fees, it also requires being on call 24/7, conducting tenant screenings, coordinating repairs, and managing all the paperwork associated with property ownership. For many landlords, these responsibilities can start to feel like a second full-time job.

In this article, we will discuss the pros and cons of self-managing your rental properties and important considerations to keep in mind if you choose this route.

The Benefits of Self-Management

More Money in Your Pocket

Professional property management companies will take a cut of your earnings. When you manage your property yourself, you get to keep more of the rent money.

Financial benefits include:

• Saving on management fees (typically 4-12% of monthly rent)
• Keeping more of your rental income
• You can reinvest savings into property improvements
• You can potentially increase your overall return on investment

For example, if your property rents for $1,500 per month, you could save $1,440 to $2,160 per year by managing it yourself. You can use that amount for property upgrades or to build your savings.

You’re the Boss

You get to make all the decisions about your property. This means you get to:

• Choose tenants
• Set your own rental rates
• Decide on property improvements
• Implement your own policies and procedures

This level of control allows you to shape your rental business according to your vision and goals. You can be as flexible or as strict as you want with your policies, tailoring them to what works best for you and your property.

Quick Problem-Solving

If something goes wrong, you can fix it right away. For instance, if a tenant reports a leaky faucet, you can address it immediately, potentially saving water and preventing water damage that could cost hundreds or thousands to repair if left unchecked.

You Can Get to Know Your Tenants

When you manage the property yourself, you can build better relationships with your tenants. This can lead to happier tenants who stay longer and take better care of your property. Self-managing properties can help:

• Increased tenant satisfaction and loyalty
• Lower turnover rates
• More open communication about property issues
• Timely rent payments due to personal connection

By creating and maintaining good relationships, you might find that tenants are more likely to renew their leases, reducing vacancy periods and the costs associated with finding new tenants.

You’ll Know Your Property Inside Out

You’ll learn every nook and cranny of your property. This helps you spot problems early and make smart decisions about upgrades.

This deep understanding can help you maintain and improve your property more effectively, potentially increasing its value over time.

The Cons of Self-Management

It Takes a Lot of Time

Being a landlord is often a 24/7 job. You’ll be busy finding tenants, collecting rent, and fixing things that break. It can feel like a second full-time job!

Without professional help, you have to do a lot of work yourself, which can include:

• Marketing and showing the property
• Screening potential tenants
• Handling lease agreements and move-ins
• Collecting rent and managing finances
• Coordinating repairs and maintenance
• Responding to tenant emergencies at all hours

For many property owners, especially those with full-time jobs or multiple properties, this time commitment can be overwhelming and may detract from other personal or professional pursuits.

Legal Headaches

There are a lot of laws about renting properties. If you don’t follow them, you could get into trouble. It’s your job to know all these rules.

Legal considerations you need to be aware of includes:

• Fair housing laws
• Eviction procedures
• Security deposit handling
• Property safety standards
• Local zoning and rental regulations

Staying compliant with ever-changing local, state, and federal regulations requires constant vigilance and education. Mistakes in these areas can lead to costly legal battles and potential fines.

It Can Be Stressful

Dealing with difficult tenants or big property problems can be really stressful. It’s not always easy to keep your cool when it’s your own property. You might worry about tenants not paying rent on time, which can mess up your own financials. Sometimes, tenants damage things in the house, and you have to deal with arguments about who should pay for fixes. 

The hardest part might be trying to be a good landlord while also having time for yourself and your family. It can feel like you’re always on call, and that can wear you down over time. 

The emotional toll of self-management can be pretty significant, particularly when dealing with challenging situations. Maintaining a professional demeanor in all tenant interactions is important but this can be difficult when you’re personally invested in the property.

You’re on Your Own

Professional property managers often have a list of trusted repair people they can call. When you’re on your own, you have to find and vet these people yourself.

Your responsibility will include:

• Building a network of reliable contractors
• Potentially paying higher rates for services
• Difficulty finding immediate assistance for emergencies
• Time spent researching and vetting service providers

Establishing relationships with dependable professionals takes time and can be a significant hurdle for new self-managing landlords.

Considerations for Effective Self-Management

Education and Training

Successful self-management requires a commitment to ongoing education. Property owners should:

• Familiarize themselves with local landlord-tenant laws
• Stay updated on fair housing regulations
• Learn best practices for property maintenance and tenant relations
• Understand financial management and tax implications of rental properties

Investing time in courses, workshops, or mentorship programs can provide valuable knowledge and skills for effective self-management.

 Time Management Skills

Efficient self-management relies on strong time management skills. You will need to develop systems and routines for regular tasks such as:

• Rent collection and financial record-keeping
• Property inspections and maintenance schedules
• Tenant communication and issue resolution

These can help streamline operations and reduce the overall time commitment.

Technology 

Using technology can help ease the burden of self-management. Consider implementing:

• Property management software for financial tracking and reporting
• Online platforms for rent collection and maintenance requests
• Digital tools for tenant screening and lease management

These technologies can automate many aspects of property management, freeing up time for more strategic tasks.

Make the Best Choice for Your Rental Property

Self-managing rental properties offer benefits, including cost savings, direct control, and intimate knowledge of your investment. However, it also comes with challenges such as time commitment, legal risks, and potential stress. The decision to self-manage or hire a professional should be based on carefully assessing your skills, available time, and long-term investment goals.

If you’re feeling overwhelmed or want to focus on growing your real estate investments, it might be time to consider professional help. Contact us today to learn how we can take the stress off your shoulders and help your property thrive.