There is nothing wrong with self managing a property – people do it all the time to save money and we understand that for many it makes sense. However, opting to manage your rental property independently rather than engaging a seasoned property management firm may appear financially favorable initially, yet it often proves to be an imprudent choice for those aspiring to thrive in residential real estate investing. This is especially true when you take into account the time savings plus the fact that our Standard Plan is only $99/month per door SEE ALL PLANS HERE>
Self-managing a rental property presents numerous potential pitfalls. Therefore, if you’re contemplating taking on this responsibility, it’s essential to consider several critical factors.
Outlined below are some key aspects you might overlook when self-managing your rental property.
Tenant Acquisition
The success of real estate investment fundamentally hinges on attracting suitable tenants – vacancy days lead to vacancy weeks which leads to vacancy months = an ROI killer! Without great tenants, your rental property becomes a liability rather than an asset. However, the crux of long-term success lies in attracting the right tenants for your property. Haphazardly renting out to anyone who applies can lead to myriad of disasters. It’s imperative to thoroughly vet all applicants, conducting comprehensive background checks. Simply relying on a decent credit score or a clean background check isn’t sufficient. You must discern the red flags in these reports and scrutinize all information provided by prospective tenants. Making erroneous tenant decisions can result in significant financial losses and a waste of valuable time.
Maintenance and Repairs
When it comes to handling maintenance and repairs for your rental property, you face two options: either engage professionals to undertake them or tackle the repairs yourself. If you lack the necessary expertise, which is common among rental property owners, you’ll need to find trustworthy professionals to handle the repairs. This entails additional work as you must vet individuals and companies before hiring them. Apart from the time invested, this approach incurs substantial costs. Collaborating with an experienced property management company like Luna offers the advantage of having reputable repair companies already engaged, thus reducing your workload and controlling expenses. Ensuring repairs are executed in a timely manner and correctly the first time is crucial, as mistakes can escalate costs and reduce your ROI.
Time Commitment
The adage “Time is money” rings particularly true in residential real estate investing. Every minute spent managing your rental property detracts from other endeavors, including finding your next investment property. Self-management demands a hands-on approach and a full-time commitment. You’ll be responsible for tenant interactions, rent collection, ongoing maintenance, timely repairs, and various other tasks. This leaves scant time for alternative income-generating activities or personal pursuits. Engaging an experienced property management company allows for a more passive approach to residential real estate investing, entrusting these responsibilities to professionals and freeing up time and energy for other pursuits.
Legal Considerations
Often overlooked are the legal liabilities inherent in residential real estate investing. Stringent landlord-tenant laws and regulations exist at both state and local levels. Failure to remain abreast of and comply with these laws can result in significant legal exposure. For instance, inadequately drafted leases, improper or delayed repairs or mishandling of security deposits can lead to costly lawsuits from tenants as well as fines. Self-management necessitates educating yourself on these laws and ensuring compliance, whereas partnering with an experienced property management company ensures adherence to all relevant regulations.
Leasing Concerns
If you enlist a Realtor to handle the lease while intending to self-manage the property, numerous move-in concerns demand attention. You’ll be tasked with handling documentation, ensuring property compliance before tenant occupancy, addressing disputes, and managing unforeseen issues during the move-in process. These responsibilities may overwhelm you, especially if you lack the requisite expertise or time. Engaging an experienced property management company alleviates these concerns, as they assume responsibility for all such matters.
In Summary
Choosing to partner with Luna Property Management Group to oversee your rental property not only offers potential long-term cost savings, but also saves valuable time and mitigates the significant headaches associated with independent management. Feel free to schedule a call HERE. We look forward to answering any questions and potentially working together!