Property Management Versus Self-Management: Which Is Better?

Property owners and investors all face the same dilemma whenever they purchase a home: should we manage the property ourselves, or should we hire professional property management? We are property management specialists, so we are obviously biased. But we understand that owners have legitimate concerns – and sometimes have a hard time choosing between the two options. On Nasdaq.com, the folks at Motley Fool wrote an article titled “Hiring a Property Manager Vs. Self-Managing: Which Is Better?” and tackled this issue. Here, we’ll review their conclusions and offer a few of our own. Reasons to Choose Property Management In their article, Motley Fool offered three main reasons why it’s preferable to hire property managers, including: – An infrastructure is already in place (including leases, applications, screening procedures, payment procedures, and knowledge of laws and regulations) – Saving time by having professionals manage properties for you – Outsourcing headaches, such as dealing with problems and angry tenants All of these are very valid reasons. On top of the above three, we’d add two more: – The ability to have professionals market your property for you – On-site maintenance staff that can handle maintenance on your behalf But what reasons did they give for doing it yourself? Reasons to Self-Manage Motley Fool came up with five reasons to go it alone and manage the property yourself. They include: – Saving money by avoiding the fees charged by management companies – Avoiding fraud and deceptive managers – Having increased control over your property – The ability to gain experience by hands-on managing – You care more than anyone else about your properties As you can imagine, we think there are important things that need to be pointed out about each of these. As far as saving money goes, you get exactly what you pay for. In other words, you are paying fees in exchange for knowledgeable and trained professionals who can help you take your properties to the next level and provide a wealth of services. Plus, you are essentially trading money for time – and you’ll often find that your time is far more valuable than 10 percent of collected income. As far as fraud goes, there are bad apples out there. If you go with proven managers with track records and reviews to back up their record, though, you can avoid this and gain an invaluable ally. And while it’s true that managing properties yourself will give you experience in real estate and in property management, gaining experience takes time and leaves you vulnerable to a million things that can and will go wrong without an experienced hand to guide you. In addition to problems posed daily by tenants who have valid (and invalid) complaints, you have to market properties, screen potential tenants, maintain properties, and navigate a labyrinth of regulations and laws – all of which can become disastrous without years of experience. Finally, we know that we care about your properties as much as you do – and demonstrate a stellar level of concern when it comes to your portfolio. It is possible to find property management that is as dedicated to your success as you are. In the end, managing a property yourself could work out for you – but chances are, you’ll be faced with difficulties and challenges that are either too great or numerous to overcome or simply not worth it. That is why hiring property management is almost always recommended for property owners.