Choosing the right Rental Management Strategy
Managing a rental property takes time and energy if you want things to run smoothly. And while you might prefer a more hands-on approach to managing your assets, you’ve probably also considered how a management company could help you with your property.
We explore the three approaches to managing your rental property and outline the relevant pros and cons.
Overview of activities involved in Property Management
So in short, a lot to do!
Outsourcing Property Management
Many people choose to hire a property manager or property management company to oversee their property. They will typically handle everything from tenant screening, tenant move-in, rent collection, maintenance and repairs and tenant move-out processes. They will also handle tenant eviction if necessary.
Who Is This Suitable For?
Pros
The best thing about outsourcing is that you’ll be responsible for handling very few property-related tasks and can leave your management company to be accountable for most day-to-day activities. If you have a fixed income agreement, you will be able to guarantee revenue, even if the property is vacant for any period.
Cons
The biggest penalty is losing income margin. Some proportion of the rental or a fixed amount will have to be The total cost of hiring property management will certainly add up over time. You also won’t be able to oversee the smaller details of property management yourself. It also means losing touch with your tenants and not being able to maintain that personal touch and your flavour of management.
Handle Management Yourself
If you’re managing the property yourself, remember that this means handling a wide variety of tasks you may not have considered initially.
As well as searching for tenants in the first place, which requires you to create listings and show people around the property, you will also have to handle various jobs like fixing appliances, mending fences, painting touch-ups or repainting entirely, and more.
Who Is This Suitable For?
Pros
With complete oversight of the management process, you are better able to see when a problem is occurring. This could be damage that is building up over time like damp or an appliance that might need to be repaired or maintained. Of course you will keep a larger portion of the margin.
Cons
If you’re not experienced in property management, and the various processes that fall within this field, you might end up struggling to keep up. This includes keeping track of ever increasing legislative burden. Fines for not being compliant are high! Keeping track of costs for accountancy purposes, handling tenant marketing, moving in and moving out processes, contract agreements and property maintenance are all time consuming.
Choosing to do everything yourself can be overwhelming and unless you are well organised, you may easily overlook something important that might cost you a lot of money in the long-run.
A Hybrid Approach?
Even if you decide you'll handle everything yourself, you may not actually have the skills needed to do everything. This prompts many landlords to outsource specific parts of the process that they’re not prepared to handle themselves, while still retaining ultimate control of the property.
Who Is This Suitable For?
Pros
This method allows you to stay in control of most things while freeing up some time and energy by employing specific individuals to help you with the tasks you can’t do yourself. Experts will also be less likely to make costly errors. You will remain in touch with your tenants and properties.
Cons
You will need to negotiate well and select sub-contractors carefully else you may end up spending just as much on individual contractors as you would a full-service property management company. Some time will still be necessarily spent on co-ordinating and project managing contractors and agents who may be sourcing tenants for you. You will still be responsible for the overall legal requirements
Finding the Right Tools for your approach
No matter what approach you choose, Reports2Go offers a number of tools and software options that might be able to make your life easier, such as our inventory expert service report.
Panos, 05 February 2021
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