As a First-Time Landlord: Direct Contact or Property Management?
Deciding whether to manage your rental properties yourself or hire a property management company as a first-time landlord can be a challenging decision. Here are some key questions to consider to help you make the right choice.
Self-Managing Rental Properties
If you are a first-time landlord, managing your rental properties directly offers several advantages. However, it also comes with its challenges. To determine if direct management is the best option, consider the following questions:
Do I know my state’s tenant/landlord laws inside and out? Do I know Federal tenant/landlord laws inside and out? Do I have access to needed forms such as leases, eviction notices, etc.? Do I have such a good relationship with local tradesmen that they will want to keep my business by doing things properly, quickly, and reasonably? Do I mind getting phone calls at any time for emergencies? Can I run my rental like the business it is and know when to stop accepting tenant excuses and evict them if needed? Do I know the proper procedures and laws for eviction? Do I know how to ...Hiring a Property Management Company
On the other hand, if you find the answer to any of these questions to be no, hiring a reliable property management company is the smarter choice. Property management companies can help ensure that all current legislation is met and keep you at an arm's-length distance from your tenant. They act as a buffer between the landlord and tenant, providing objectivity and professionalism in handling tenant issues.
Advantages of Hiring a Property Management Company
The best practice is to hire a property management company either for a flat fee or a percentage of gross rents. Here are some reasons why hiring a property management company is beneficial:
Legal Compliance: They ensure that all current legislation is met, saving you the trouble of staying up-to-date on legal requirements. Emotional Buffer: Managing tenants directly can become emotionally involved, leading to poor decision-making. A property manager keeps landlords and tenants at an arm's-length distance. Professional Tenant Screening: They can determine how much you should be asking for rent and find and screen tenants better than the landlord can. Expertise in Eviction: They have experience with when to cut a tenant some slack and when to evict them if needed, based on the procedural and legal aspects. Resources and Support: They have resources such as a list of handymen, plumbers, cleaning crews, etc., that they know do good work at fair prices.Why You Should Hire a Reputable Property Manager
When choosing a property management company, it is crucial to hire a reputable one. A skilled property manager can do much more than just deal directly with tenants. They can:
Determine the appropriate rental price. Find and screen tenants more effectively than the landlord can. Provide flexibility to cut a tenant some slack when necessary while knowing when to be strict. Offer a wide range of resources, such as professionals who provide good work at fair prices.In conclusion, as a first-time landlord, weighing the pros and cons of direct management versus hiring a property management company is crucial. Consider your specific situation and needs to decide which option is best for you. Whether you opt for direct management or hire a property management company, ensure that you are making the decision that is in the best interest of your rental business.