Picking the perfect rental property to purchase can be a tough decision. Especially if you are starting out in investing and this is one of your first investment property purchases. Our company brings deeply discounted off market properties to our investors but there are still many considerations for an investor. One of the biggest decisions to consider if how involved you want to be in the property management process.
Do you want to hire a property manager and sacrifice some of your rent or manage it yourself? There are pros and cons to boyj. Let’s go through some of them:
Pros to self management:
- Save on monthly management costs
- More involved in tenant selection process
- Can do repairs at a reduced price or only pay for materials and do the work yourself
Cons of self management
- Tenants have direct access to you and can pester you endlessly
- Lack of access to economies of scale with material pricing
- Must track expenses yourself
- You always have to be available even when you’re on vacation, off-hours, etc.
Pros of professional management
- Drastically lower time commitment
- Repairs handled automatically
- Unlimited capacity to manage
- Software is usually provided to owner for better overview of rental portfolio
- Expenses tracked automatically
Cons of professional management
- Lose a portion of monthly rent to management company
- Repairs costs can be inflated
- Not directly involved in tenant selection process usually
When deciding on managing your rental yourself or hiring a professional management company, you have to consider your goals. If you are only looking to have a few rental properties, it might make more sense to manage yourself and keep as much of your monthly cash flow as possible. But, if you’re looking to grow a sizable rental portfolio, the professional management route makes the most sense. If you’re aspiring to be a full time investor, you want to be acquiring more great deals, not fixing toilets at 3am!