Before deciding between self-management and hiring a professional property manager, landlords and investors should make some basic considerations. The question of whether management is possible without professional help comes up often. In principle, self-management is always possible, but for maximum return, working with a professional who can effectively manage and protect your assets may be more attractive. However, if you have experience in rental property management and can invest the necessary time, self-management is worth considering.
Comprehensive information before making a decision
Before making a decision, it is important to be fully informed about both options and to take your individual situation into account. Managing a single-family home is very different from managing a large portfolio or a fully leased multi-family home.
There are many different ways to learn about property management and the local rental market. These include courses, seminars, blogs, exchanging experiences with fellow property managers and networking with experienced people.
However, working with a professional management company offers a wider range of knowledge, experience and resources. Property managers usually know the market better and more deeply than individuals. Your expertise as an owner makes it easier to evaluate your property, as you know, for example, how to set rental prices and attract the best tenants for your property. A professional property manager can help find qualified tenants, thus minimizing the risk of default or damage to your home, which will not have a negative impact on your assets.
Mistakes are often made in self-management due to carelessness or ignorance. Professional property managers have already learned from such mistakes, have the appropriate infrastructure and know-how, and have established procedures and processes based on a wealth of experience. They have applications, rental agreements and corresponding criteria that have been reviewed and approved by specialist lawyers. With a professional property manager, you can avoid inadvertent violations of applicable laws or tenant protection regulations.
Property managers know the relevant laws relating to the processes surrounding the property and take care of all legal aspects should a legal dispute arise.
Professional property management or self-management – return optimization
Treating rental properties as a business is crucial, even when managing them independently. A property manager always acts in a business manner and considers every decision in terms of return on investment .
- Less vacancy: Professional property managers have more comprehensive marketing tools and resources to optimally present your house/apartment and rent it to solvent tenants. Property managers benefit from the size of their management portfolio, which significantly reduces marketing costs.
- Reduced tenant turnover: By maintaining relationships with your tenants, property managers can defuse conflicts more quickly and address tenant concerns, resulting in longer tenancy periods.
- Consistent rent collection: A professional property manager ensures that rent is paid on time and consistently follows up on arrears, minimizing the risk of non-payment.
- Lower operating and maintenance costs: Many providers (including electricity, water, internet) offer property managers volume discounts, which can lead to significant savings in operating costs. Framework agreements with caretakers and tradesmen reduce maintenance and repair costs.
- Professional advice with know-how: Due to larger management portfolios, property managers must always be up to date with regulations, technology and best practices. As a customer, you benefit from extensive specialist knowledge.
Although professional property management does incur monthly fees, the benefits of professional management and the associated savings elsewhere still have a positive effect on the return on your property. In addition, property management fees are often tax deductible.
The property manager also takes care of the often tedious utility bill settlement for the tenants and the numerous queries that result from this. You can also be sure that the professional manager knows which costs can be passed on to the tenants so that the cost burden on the owner’s side does not become unnecessarily high.
It is also important to remember that managing properties can be stressful. Tenant problems can arise at any time of day or night and, depending on their severity, must be addressed immediately. The advantage of a professional property manager is that they act as a “buffer zone” between you as the owner and your tenants.
Which is more cost-effective?
One of the risks of managing your property yourself is placing bad tenants who don’t pay and cause damage. This could result in costly evictions and repairs. When hiring a professional property manager, there is the concern that they will see your property as just another property and therefore view the emotional value of your property differently than you do. However, thorough research and selecting a reputable management company can increase your confidence and ensure that your concerns are addressed accordingly.
In the best case scenario, you can successfully manage your rental property yourself without encountering problems with tenants or defaults, but this is more complex and time-consuming when managing multiple rental properties yourself. The same applies to professional property management, which achieves the same results without you having to actively intervene.
Conclusion
Making the right decision requires thorough research, talking to other landlords and weighing the costs and benefits, whether you choose to self-manage or hire a professional company. We at DAO are available to talk about our professional property management or offer you additional resources.
