When Should You Fire Your Property Manager and Manage Rental Properties Yourself?
The decision of whether to manage your rental properties yourself or to hire a professional property manager is a critical one that can significantly impact your investment returns. Whether you are a seasoned property investor or a first-time landlord, it is important to assess your capabilities and the market conditions to determine the best course of action.
Self-Management Requirements
Before you decide to manage your own rental properties, consider the following factors:
Proximity to Properties: Do you live within a 10-minute drive to your rental properties? Schedule Flexibility: Do you have the flexibility to manage the properties on a daily basis? Monthly Income: Do you make less than $50 an hour, approximately $100,000 annually? Maintenance Knowledge: Do you understand the maintenance requirements of building appliances? Tenant Screening: Do you have the ability to objectively screen rental applications and understand basic contract law? Property Economics: Do you have a solid understanding of the economics of rental properties?If you possess most or all of these qualities, managing your rental properties yourself could be the best decision. However, even with a professional property manager, it is essential to appreciate that vacancy rates drive your return on investment. A well-maintained property with no vacancies will yield higher returns than one that frequently remains empty.
Strategies for Effective Property Management
Whether you choose to manage your rental properties yourself or hire a professional, here are some strategies to ensure success:
Set Clear Goals: Understand the market dynamics: Develop strong tenant relationships: Implement thorough maintenance routines: Keep vacancy rates low:Dismissing a Property Manager
Based on your current situation, it is likely time to fire your property manager. When interviewing a prospective property manager, it is essential to clearly outline the specific goals you expect them to achieve. They should have a proven track record of successfully meeting those goals.
If the current manager has consistently failed to meet these goals, it may be time to consider a change.
When searching for a new property manager:
Evaluate their previous success in achieving similar goals. Ensure they have a solid understanding of the local market. Consider the contract structure and make sure it includes provisions for shared pain during vacancy periods. Set clear performance metrics and review them regularly.Conclusion
The decision to manage your rental properties yourself or hire a professional property manager is personal and depends on your specific circumstances. If you possess the necessary skills and conditions, managing rental properties yourself can be highly rewarding. However, if you lack the time, knowledge, or capability, a professional property manager can provide the expertise and support you need to succeed.
Regardless of your choice, remember that understanding vacancy rates and setting realistic rental prices are crucial for maximizing your returns. By following these recommendations, you can make an informed decision and increase your chances of success in the rental property market.