Step one of any decision that comes with either short term or long term impact is to know your goals and your values.
When thinking about whether to manage property on your own or bring in a property management company, you have to ask yourself what the goal of these investments are. What do you value most? Do you have a goal of truly passive income with minimal effort? Or, are you willing to put the time in to having full control and visibility over the entire process?
Most people get into property investing with the long term goal of getting out of debt, or financially planning an abundant future. Though, when you’re just getting started, the focus should be on your short term goals. How are you going to best achieve your long term goals in the here and now?
Know Your Skills
What skills have you picked up over your life? Do these skills lend themselves well to property management? More importantly: do you enjoy practicing this skills? There is little point in choosing to do an activity that adds unsurmountable stress to your life. Many people get started and realize there is a lot more involved than initially expected, so we’ve laid out some simple pros and cons of each option.
The DIY Landlord Pros and Cons
Provided you have the necessary skills and knowledge (you’re a licensed general contractor, or you’re well connected to trusted sources in the industry), the DIY option is by far the cheapest solution. That is, as long as you ignore opportunity cost and comparative advantage.
Spend less money
You’re on call 24/7
Mistakes may cost more money in the long run (maintenance and legal risks)
Many jobs require more than one pair of hands
Whenever you make a choice to spend your money or time doing one thing you are subconsciously choosing NOT to spend that time or money on anything else. That is the nature of opportunity cost.
By choosing a certain activity, what are you giving up? How much time are you spending managing your own properties and what is your time worth?
Full Service Property Management
The opposite end of the spectrum is full service property management. I use the term “full service” to mean it covers all aspects of rental property management. There is no point in hiring a full service firm if you expect them to get approval from you any time there is a repair exceeding $100.
Full service property management is ideal for the person who wants to own rental properties, enjoy the income, but have none of the headache (aside from income taxes). Anyone buying an investment property should consider the cost of property management in their ROI calculations regardless of whether or not they plan to self-manage. Time is a cost. You either pay someone else or you enjoy less discretionary time.
They are in touch with local market conditions
They’re able to maximize rent
Someone else answers the calls 24/7
Someone else deals with your tenants problems
You don’t have to personally evict anyone
It may be hard to evaluate quality
Hidden fees may misalign incentives
Management fees eat into potential profits
You may lose visibility into problems that occur at your properties.
Do Your Research
For those who align best with the DIY landlord option, there are many tools and technologies out there to simplify the process, saving time and keeping the control.
Though, for those who are ready to relinquish control and spend their time elsewhere while still receiving a majority of the profits, it’s time to start looking for a property management company.
Research is key. Check online reviews. Ask about all the fees associated in out-of-the-norm instances like tenant evictions, vacant properties, maintenance operations, etc. Always talk with at least a few different companies to get to know how each one does each process differently, and go with your what your values align with most.
At Latchel, we work with some of the nation’s top property management companies to provide 24/7 maintenance coordination. If you need recommendations, reach out to us and we’ll be happy to refer a company in your market.
At Latchel we take over property maintenance coordination giving landlords and property managers the time to focus on what’s important to them.
We do this through our 3 core products:
Our after hours emergency service, which ensures you are never woken up in the middle of the night for a maintenance call again;
Our 24/7 emergency service, night or day, all day, every day, we've got you covered;
Our premium service, which is an all encompassing maintenance coordination product.
Across all of our tenant reviews, we boast a 4.7 out of 5 stars for tenant satisfaction. Landlords and property managers who use Latchel love our product because they can sleep easy knowing we have their maintenance covered along with excellent guaranteed vendor pricing.
We improve the maintenance experience for everyone because at Latchel, we truly believe that you cannot get better by staying the same.
Interested in learning more? Schedule an exploratory meeting with us below. We’d love to help you find the best option for you: