What Every Landlord Should Consider Before Self-Managing a Rental Property
When a landlord purchases a rental house he will make a big commitment towards managing the property, tenant and funds. The complexity will compound itself if the landlord resides out of state from the rental. Listed below are some questions that a landlord should consider before self-managing a rental property.
Will I have enough time to manage the rental?
Rental property can be very labor-intensive. There may be physical labor involved if you are “hands on” landlord and you do your own repairs and maintenance. Or there will be time commitment just attending to the tenant’s needs and the property repairs and maintenance. The most demanding time is when the property goes vacant. There will be painting, cleaning, utilities, advertising, showing, etc. to get the property rented. Do you have the time to devote to the care of your rental property and needs of your tenants?
Do I have the local resources to prepare the property for rental?
Do you have honest, reputable tradesmen to do the repairs and maintenance for your rental? How will the completed work be verified? Will the tradesmen work for an out-of-state landlord?
Where will you advertise the vacant property? Who will show the property to tenant prospects?
Print newspaper classified ads are a thing of the past. Where will your ads be placed? Or will you only put a street sign in the yard? Street signs are often an invitation to local hoodlums to break into the vacant home.
How close do you live to the rental property?
Rental properties never receive the same care from tenants as it would from a homeowner. Things will wear out faster and break sooner under tenant’s usage. Are you available to handle emergencies (flooding, electrical, etc.) quickly to avoid further damage? Will you be able to respond to legal problems with the tenant? Evictions are a real solution to tenant abuses, however, tenants do have legal rights too and can drag a landlord into court to settle cases. Be prepared for legal rebuttals.
How large is your rental property portfolio? Too many to self-manage?
What is you time worth? Are you capable of managing one property or more? How many properties can you successfully manage?
How are your personal organizational and multitasking skills?
Property management is not only knowledge of repairs and maintenance but of advertising, leasing documents, real estate laws, accounting and tax law. Each property will require these disciplines to successfully manage your properties.
Do you know your state’s landlord/tenant laws?
Do you handle stress well?
Should you retain a professional management company?
Consider a management company to relieve you of the rental learning curve. The “on the job training” can be very expensive and exhausting to experience. Many problems can be easily be handled by an experienced property management company. You can save time and money if you would consider a good management company.