I’m Keeping My Project Post-Construction. Should I Manage it Myself?
Out of all the questions our clients ask, the one poised in this post’s title makes the top-10 list for frequently asked questions. Our executive team is highly familiar with leasing and property management, so we cannot stress enough how this is a topic that needs to be explored for any real estate investor in anticipation of adding properties to their portfolio. To explore the answer to this question further, a “yes” and “no” answer has been given below followed by reasons why that is the case. For the sake of discussion, the words “myself” or “yourself” refers to you (the reader) and your company, so this also includes your employees. Take a look at each perspective, and know that WALL2WALL Consultancy can help you prepare for either scenario in consideration of your time and most importantly, your take home profit.
Yes, manage the property yourself if you:
Believe the best way to track an investment is to be hands on. Being involved with the lease up and property management will give an immediate understanding on market trends, property status, and which value-add improvements can be made for future.
Want to save money. Management companies will either ask for a flat fee or percentage cut on rent payments for management and leasing fees, so the less you pay out the more revenue you get to keep.
Enjoy social interaction. From showings and lease signing to maintenance inquiries and tenant questions, expect this to be an opportunity to get to know lots of new people and expand the amount of interaction you have with a new audience.
Have a difficult time trusting people. Self-management reduces vulnerability from both an interpersonal and financial perspective.
Have managed properties before (and enjoyed the exercise) in addition to having solidified contacts with maintenance contractors.
Want to make property management another element of your business. There is more to this sector than meets the eye, so speak with one of our consultants if this is something you are considering.
No, hire a property manager if you:
Do NOT like criticism. The majority of showings completed do not result in a closed deal. It is very common to receive feedback during or after a showing relating to the floor plan, finishes and decor, location, amenities (or lack thereof), or other features that a prospective renter is considering that could determine whether your rental is chosen over another property. Hiring a property manager would add a professional third party to the Landlord-Tenant negotiations that would filter any criticism that could be taken sensitively.
Have too much on the go/are short on time. In property management, some days are quiet while others are filled with issues. If you have activities (such as starting and completing other developments) that you think are a better use of time, leave the exercise to a group that solely specializes on managing properties such as yours. They will also handle taxes and legal matters such as evictions so you don’t have to.
Would rather not involve yourself in other people’s personal lives. The proper rental application process involves the reviewer immersing themself into the financial, background and credit history of each applicant, and depending on the situation, could mean long conversations with applicants on personal situations effecting their application quality and tenancy (this is where our industry gets personal). Someone who avoids mixing emotion, drama and personal situations into business should avoid this task.
Have minimal to no patience for complaints. Some Tenants pose simple maintenance requests or questions as complaints (purposefully or not is case dependent), others may complain due to a logical item needing to be addressed, and the small but annoying few complain because that is a personality trait of theirs. Property managers should be able to handle all of these instances and only involve the Owner when necessary.
Do not know/understand Landlord-Tenant relations and the laws associated with them. Some seemingly habitual decisions could violate the laws set forth in your jurisdiction. There are laws associated with payment collection, entering the rental unit, tenant selection and required costs to the tenant that if broken, can cause many issues for a Landlord.
Do not live within a couple hours from your property. Whether it be a long commute to visit the property for inspections and repairs or being on a different time zone as your property’s location, it may be inconvenient to take calls or visit the property regularly. For optimal Tenant communication and property upkeep, there should be a locally based individual/team that can be relied upon to address items when and where needed.
These are just some of many points to consider when determining whether you need a property manager for your newly built rental property. Our consultants are here to help you make the best decision for generating income from your project, and if you determine that you would like to hold onto and rent your property, WALL2WALL Consultancy can guide you through the process so that you are prepared for finding suitable tenants and, if you choose to hire one, the right property management team.