At a certain point in a landlord’s life, they have wrestled with the question, ‘Self Management or Property Management?
The title of this article makes me chuckle because of all the times I’ve wanted to quit managing properties. I speak with owners about us managing their property when they can’t take the frustration anymore.
Today, Evernest manages over 6,000 rental properties for owners and investors like you.
Some years back, we had just taken over the management of 20 properties. This owner was used to self-management.
At some point, the owner (a local attorney) made the decision that his time was worth more than what he was saving by self-managing.
Ultimately, that’s the value of property management vs self-management: more time, fewer headaches. Now that doesn’t mean it’s all rainbows and butterflies from here. Managing rentals yourself is hard, but so is property management.
Did you hear that?
It may make you feel better to know that even a property manager thinks it is a hard business. Being a property manager means you are in the middle of a conflict or something breaking all the time.
So, don’t feel bad, you just need to understand that this is what a property manager does for a living.
The constant breaking (at the wrong time) or conflict (when you should be working at your day job) is enough to make any self-managing landlord burn out.
So how do you know when self-managing isn’t right for you anymore? Other than it may even be costing you money (and not just in Advil).
Let’s take a look at the 5 signs you may be ready to hire a property manager.
I heard a recent story from our owner sales department about a lady who was “friended” by her tenant on Facebook. She thought that accepting it was innocent enough.
Then Christmas rolled around and her tenant was behind on the rent.
She made the decision to reach out on Instant Messenger. Low and behold she did have money, but she spent it buying everyone Christmas presents – and she wasn’t hiding it because the pictures were all over her Facebook profile.
Needless to say, she decided she didn’t have the emotional fortitude to be in the collection business anymore and called us.
This is probably the number one sign of things beginning to slip and you burning out. If a tenant is taking advantage of you and you don’t have the time or the emotional energy to do something about it, you probably need to hire a professional.
Someone once told me, “If you can’t evict someone on Christmas Eve, then you don’t need to be in the property management business.” This is probably a bit of a stretch, but you get the point.
This is also the beginning of the spiral down. You look down at your phone and your heart sinks because you know you are about to deal with a problem.
Remember tenants leave when you don’t meet their needs. If you aren’t answering and handling maintenance calls, then you are going to create a problem for yourself. The tenant will leave and you will create more work for yourself.
This is perhaps the most dangerous of all. I really believe that leasing a home is a “numbers game and a people business”.
As soon as you tire of showing the home, you are much more likely to just stick anyone in your home.
If you find yourself becoming slack on the discipline of the leasing process, you need to employ a professional manager (or sell the house)!
Many times people get into self-managing to save money. They believe they can’t afford to have the luxury of a property manager.
But, as their income has improved, they take a step back one day and realize being a manager is actually costing them money. Losing money from managing property is not a wise business decision.
This is very similar to the one above, but this is speaking specifically to investors of rental homes.
If you enjoy the “art of the deal” and would rather be in the market purchasing more properties, then self-managing may be keeping you from finding all the deals.
If you purchased one more house per year with your freed-up time, then you would be financially way ahead of self-managing. Particularly, over the course of 3-5 years.
Firing yourself can be a tough thing. Paying someone else to do something you can do is also a tough thing. “What does a property manager even do?” you ask. We wrote an article describing what services a property manager does and the costs associated with it.
One of the truths I’ve learned in owning a rental property is that you should constantly be analyzing your situation.
What are my opportunity costs? What can I afford to pay a property manager? If you aren’t constantly re-analyzing your situation then you might end up in trouble.
I suggest you take a hard look at your situation. Then decide if self-managing over professional property management is right for you.
We’d love to chat with you about your property management needs.
Give us a call directly at (205) 940-6363.
Matthew is the CEO of Evernest. He is a student of the book Good to Great and is passionate about building the best property management company on the planet (and maybe even the universe if Elon Musk will hurry up). You can usually find Matthew at the baseball field with his son, at a dance recital with his daughter, or at his favorite restaurant with his wife, when he’s not in the office. And if you can’t find him in any of those places, it probably means he’s traveling.