Professional Property Management vs. Self-Management

Published: May 16th, 2017

Seven considerations for the Rent Estate Investor. 

Congratulations! You have decided to turn your home into Rent estate or you have purchased an investment property and are now deciding whether or not you want to hire a professional property manager. Many real estate agencies offer property management services for a percentage of the monthly rent, plus a tenant placement fee, then add administrative fees, and perhaps a mark-up for management fees. This can cut into your bottom line, but most successful Rent Estate™ investors who have built significant portfolios agree: a good property manager is worth their weight in gold.

Below are a few things to consider when making this decision:

1. Will you be able to keep an eye on your property?

Are you moving far away from your rental property? Will you be able to make time to inspect your property, or at least periodically drive by your property to see if your tenant is maintaining the outside?  

If you are moving far away, or don’t anticipate being able to have a look around your rental from time to time, you should hire a property manager to keep you updated on how your tenants are treating your investment.

2. How are your marketing skills?

Have you ever sold something on olx kenya? Do you feel comfortable using Jumia, BuyRent or any of the many other web applications to market Rent Estate™? Do you know how to download pictures from a camera to your computer? Are you a reluctant writer?

Professional property managers are experts in all these elements of marketing Rent Estate™. If your property is ready, a good property manager will be able to price your property correctly, and create and maintain a compelling ad campaign so that you start receiving serious inquiries by quality prospective tenants within 24 hours.

3. What do you know about leasing?

Do you have a written lease? Do you know the difference between a “deposit” and a “fee?” Is your lease compliant with your local jurisdiction? Are you familiar with fair housing laws? What about landlord tenant laws? What about multi-year leases?

Under no circumstances should a Rent Estate™ investor rely on a handshake agreement allowing tenants to occupy their property. It’s a recipe for disaster. Professional property management firms will have leasing materials that comply with local laws as they relate to leasing your property. Also, a good property manager will have the tools and knowledge to place a quality tenant in your property in compliance with all applicable laws.

4. Do you know how to perform a background check?

Do you have the time to contact a prospective tenant’s prior landlords? Do you know what questions to ask? Do you have the ability to acquire credit and criminal history reports?

Being a Rent Estate™ investor is already a risky proposition. Renting to someone without performing a background check is madness. A background check should include a credit report, rental history, and criminal history report. A skilled property manager will work to screen out prospective renters who may not have the ability or willingness to pay on time, as well as those with criminal histories. They will also take on the time-consuming task of tracking down prior landlords and inquiring regarding a prospect’s rental history. Letting a property manager handle the background screening will save a Rent Estate™ investor a ton of time and provide the deepest possible pool of qualified renters available.

5. Are you prepared to answer prospect questions and coordinate showings?

We all often hear just how competitive the rental market is. This is true. Still, we live in an age of convenience. Prospective renters want to view the property at times that work for them, usually nights and weekends, and many times will skip out on showings without a call or text. They will also ask a ton of questions. Very often, the answer will already be spelled out in the listing. Professional property managers will have the experience to coordinate showings, the skills to clearly spell out common tenant questions in a listing, and the patience to answer a prospect’s questions completely and politely.

6. Do you have experience collecting rent?

Are you comfortable with online banking? Have you thought about a policy and procedure should a tenant fail to pay rent? Are you comfortable with confrontation?

Having a tenant who refuses or cannot pay rent is a Rent Estate™ investor’s nightmare. Rest assured, your lender will not be sympathetic if you tell them that you can’t pay your mortgage because your tenant is not paying their rent. Tenants have rights to your property (for a while) even when they are failing to pay rent. Evictions are time consuming and expensive. A quality property management firm will have procedures and policies in place to make collecting rent easy and will know how to communicate with them in a way that is firm and gets results. Some even will have entire divisions dedicated to delinquent rent.

7. Are you prepared to handle an eviction?

Do you know the proper legal steps to efficiently evict a destructive tenant or a tenant that does not pay rent?  Are you familiar with your liability if you perform a “Self Help Eviction?” Does letting a professional handle an eviction sound much better than handling one on your own?

Evictions are costly, time consuming, and unpleasant for everyone involved. During the eviction process the tenant will likely resist paying rent, and many times will cease to maintain the property. If handled improperly, an owner can be exposed to unnecessary liability, a long and expensive process, and end up with an abused rental property. A professional property manager will correct small problems (like being late with the rent) before they become big ones, and in the worst case scenario: execute a legal and efficient eviction that minimizes vacancy loss.