Can I manage my Rental Property myself? Sure, if you are willing to spend a lot of time learning the business.
Not everyone should use a property manager or professional landlord service. It adds an expense to your cash flow statement and creates distance between you, your property, and the tenant. So the question is this ‘what are the issues to consider as you think through this question?’. Here are some things you need to do, or know before you can effectively manage rental properties::
Local, State, and Federal Laws.
Getting familiar with all of the local, state and federal laws that govern this business can be time consuming and require good attorney support along the way. In addition to HUD, Fair Housing Laws, Discrimination Issues, you also have a multitude of FCRA, Rental Licensing Ordinances, Inspections, Rent Collection policies, Eviction laws and processes, Etc. In short, the Landlord is trying to run a business, usually without the benefit of experience, legal, banking, or marketing support. Just 1 month of vacancy can generally pay the majority of the fees charged by a Property Management Company to do all these things for you.
You will be better off hiring an experienced Property Manager.
Marketing.
Do you have the time to post your Rental Property on over 200+ websites? Is MLS effective for rental properties? Do you know how to track click data so you can make sense of the rental market, and set your rental rates correctly? Do you have the time to track incoming calls, answers general questions about screening or qualifying tenants? Can you create professional PDF brochures, determine competitive rental ranges, and decide what kind of pet restrictions to set? Do you rent you home with or without a washer and dryer? Do you know who should pay utilities, association fees, or for certain types of maintenance? Do you need a rental license BEFORE you can advertise your home?
An experienced Property Manager can do all of this for you and knows the answers to these questions.
Showing Properties.
Tenants generally have jobs, and so do you. They look at houses in the evenings, on weekends and holidays. That is usually the time owners want to lay back and watch the game. If you are not willing to show your property 24/7, you may need to re-think managing without a property manager. Do you know what to tell the tenants of they ask of you screen applications, or want to repaint a room. Do you have written screening criteria that must be disclosed by Minnesota Law? What do you tell a tenant who has a disability and wants to make an accommodation in the home they are interested?
An experienced Property Manager can do all of this for you and knows the answers to these questions.
Managing the tenancy.
Many people are not good at managing others. Can you handle conflict resolution? What if the rent is late, or there is a police call? Do you have a process for escalating a delinquent rent payment, or lease violation? Do you have a means of recording rental payments, can you perform auto-debit ACH rent collections. Do you know how to fill out a CRP form? How about paying vendors, as a Landlord you need to provide 1099's to vendors doing more than $600 in work on your rental home. Is it legal for a homeowner to do repair work in an occupied rental. Are there quiet enjoyment and tenant privacy laws you should be aware of? What if you are sued by a tenant for a rent escrow, or for a habitability violation? This is where a Property Manager can help find solutions issues that arise occasionally. Do you know the State Statutes for Landlord-Tenant Laws?
Property Management is as much managing people as it is properties. A Management Company can do all this for you.
Handling a bounced check or NSF
How do you document a late rent payment? When do you determine if an eviction action is appropriate? Does your lease allow an eviction to continue with partial rent payments?
A good Property Management Company has processes in place for escalating NSF issues. Our process of escalation can include Attorney involvement, UD processing, Collections Agency Placement, and follow-thru. The time it takes you to figure it out, or let your attorney deal with it, will cost you a great deal, in addition to an unplanned vacancy.
Filing an Unlawful Detainer (UD) with the court.
Do you have a process and know the laws regarding filing Unlawful Detainers? Do you know which court they are filed in, or what the legal eviction process is? Angry phone calls, registered letters, nasty e-mails or threats do not form an effective process of enforcing the terms of a lease.
A Property Management Company can do all this for you, professionally.
Unauthorized Pets.
Approximately sixty percent of American households have a pet. If you said 'no' to pets, does this mean that you home will be pet free? What do you do if your tenant has an unauthorized pet? Demand letters generally don’t work. Threats don’t work. Figuring out what does work will take you a while, and time usually costs money in one way or another.
A Property Management Company can do all this for you, professionally.
Security Deposits.
You cannot charge a tenant ‘normal wear and tear’ at move-out. Do you know what the courts consider ‘normal?’ You need to, because the number one conflict with good tenants is not rent collection, but move-out charges. Be prepared to defend your charges or the judge will do it for you. Do you know how much interest you must provide on the security deposit, or how many days you have to return it?
A Property Management Company can do all this for you, professionally.
Maintenance and Repairs.
Do you have good reliable contractors? Can they also do emergency HVAC or Plumbing repairs in the middle of the night? Do these contractors have insurance, or a license to do the type of work needed? What if the home was built before 1978, are they LBP certified? Fixing Plumbing leaks of clogs in the middle of the night is not fun. Are you ready for that call at 2 AM?
A Property Management Company can do all this for you, professionally.
Conclusion
Renting out your own property sounds easy, but once you realize all that is involved, it is generally not worth the time and effort putting a management process in place unless you intend to become a professional property manager. Many people try to do their own repairs on their cars too, but soon realize that the cost of equipment, knowledge, and time far exceed the marginal savings (if any) of their efforts. The inexperience costs extended vacancies, poor tenant selection, expensive maintenance, poor contracts, legal issues, etc.
Not only that, but generally Property Management Fees are also tax deductible as well, unlike your personal time, so you will be far ahead of the game when you use a Property Manager to manage your rentals.
Give 33rd Company® a call TODAY! We can help you make more money; with less work than if you tried to do this all yourself.
LESS STRESS, MORE SUCCESS. RENT YOUR HOME WITH CONFIDENCE!
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