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What’s up guys!
Hope we all had a great week, it’s NOVEMBER people!
Wow, 2019 is absolutely FLYING right?
How’s it coming along for you?
Sadly I haven’t quite achieved my two main goals yet… (sad face). But don’t worry, there’s a couple more months left, let’s hustle hustle!
Today’s post is a shorter edit of an article I wrote for an Australian Property Magazine named Your Investment Property. The magazine is about… um, investment… properties.
The article is based on some of the things to look out for with managing your own properties versus hiring someone to do it for you, hope you enjoy!
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Earning passive income from property isn’t just a matter of buying a dwelling and sitting back while you pick up the rent payments each month.
A great deal of effort goes into managing a rental, which includes everything from maintenance to communicating with tenants to marketing the property.
This can be challenging, especially if you have a portfolio of multiple properties, which is why many choose to enlist the aid of property managers.
Some investors however are happy to accept the challenge.
But in the long term, which is the better choice?
DIY
When you want something done right, you do it yourself.
After all, it is your property, and no one cares about it as much as you do.
A property manager is also one more expense on top of the many costs you take on when owning an investment property.
Also, you’ll find that you get what you pay for with many property managers, so if you try to save in this area you could wind up with an inefficient manager… which brings you back to square one.
Managing your own property takes you through a wide spectrum of property investment processes. You learn to advertise rentals via the right media; screen tenants; negotiate terms and rates; and set inspection schedules.
Nurturing relationships with tenants as both the owner and property manager can also inspire greater respect and camaraderie between both parties, enabling you to hang on to good renters in the long term.
Along the way, you become a better communicator, improve your people skills, widen your network of industry contacts, and gain broader knowledge of the property market in general.
Hiring Someone
Not every investor is up to the task of managing property though, especially those with sizeable portfolios or investments across different states.
It’s a process that can be costly in terms of money, time and effort.
For some, the expenses involved in self-managing can far outweigh the benefits.
“Most property portfolios are six-, sometimes seven-figure investments. You’d want an experienced professional to manage it instead of leaving it to chance…
…Whether you own one property or multiple properties across multiple states, it makes sense to engage with professionals. I want someone who has the systems, processes and policies in place to deal with whatever arises.” (quote TheFrugalSamurai circa mid-2019).
The Cost
While property managers do cost money, ultimately, the cost is not that significant when the time and effort required to do it yourself is taken into account.
Says TheFrugalSamurai:
“In my portfolio, I’ve worked it out to be around $20 per week per property, which, after tax deductions and comparing the number of hours involved if I was to do this DIY, makes it a no-brainer.”
Communication
The key to a good property manager–owner relationship is communication.
TheFrugalSamurai says:
“If things are running smoothly, then you’d expect minimal contact with your property manager. But there are certain periods when strong communication is key…
…For instance, if your property is being advertised for lease, you should be receiving updates post every open viewing as well as weekly feedback as to how the lease campaign is progressing…
…With any maintenance issues that arise, you’d expect to be notified of any urgent issues immediately, with non-essential issues summarised in an email, preferably with quotes…
…The really good property managers will be an invaluable source of market information on setting the rent at lease renewals, knowing the types of properties tenants like and dislike, as well as rental market direction. You pay them, so use them!”
Conclusion
Ultimately, the choice between self-management and hiring a property manager comes down to the quality of the attention and effort you want to give your property.
If you are able to commit to the process of looking after a rental, DIY management can be the way to go.
If you want a more hassle-free investment experience that enables you to concentrate on acquisition, hiring a property manager could be the better call.
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What’d you think guys? Did ya like it!
Oh, and as to my thoughts which one is better? Unless you haven’t determined from the article… check out this post I wrote on Property Management earlier.
Which option suits you? Let me know in the comments below!
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45 Comments
Krysten Quiles
I definitely don’t think I would have what it takes for property management. Thanks so much for sharing this with all of us!
The Frugal Samurai
Hahaha it ain’t for everyone that’s for sure! Thank you for reading Krysten 🙂
Renata Feyen
I don’t think I would try to do such a thing by myself cause I have no knowledge whatsoever of these kinds of things 🙂
The Frugal Samurai
Same here Renata! Like you, would be completely clueless (probably end in tears), haha thanks for reading!
Searcy
This is so informative. We’ve been thinking about turning a property into a rental and this gives us a lot of information.
The Frugal Samurai
Happy to help out of course, anytime, anytime 🙂
Kuntala Bhattacharya
A piece of good knowledge and read for me on property management and how to hire an appropriate person for it. I can surely recommend to my friends who would need suggestions.
The Frugal Samurai
Twas my pleasure Kuntala! How does it work over where you are… are property managers difficult to find?
Melanie Frost
I’ve been a property manager before and it was nice saving the money. But it would have been nicer if my tenant wasn’t always late on the rent. We ended up having to kick her out. Makes me think twice about doing it again. This is super helpful!
The Frugal Samurai
Ouch! How’d you find the whole managing relationship process Melanie? Yeah… probably wouldn’t after your experience aye!
Quan Tran
Wow, you have been blogging for a while I see. Great job
The Frugal Samurai
Yeah I have, thank you Quan!
Michael
Still depends on the situation I guess? If you know someone who is already trusted and have knowledge why not but doing your own research is no bad either.
The Frugal Samurai
I guess… although personally would like to keep a bit of distance y’know?
Crickette, The Things I Have to Say
I think there are pros and cons that you have to consider with this. Hiring one takes away the work of having to scour the market, whether you’re selling or buying, but they also require high fees.
I think if you have time and experience, you can DIY. But if you are clueless, you can end up going around in circles, achieving nothing significant.
The Frugal Samurai
Nice one! Completely agree, can I also add that it depends on the time factor as well, sometimes just canNOT be bothered dealing with issues after a long, hard, day’s slog ya know!
Sundeep
I think it varies from case to case and person to person. Though DIY is a great option but is very demanding on your time. A property manager can save you time but it comes for a price.
The Frugal Samurai
Nailed it SPOT on sir, well played… (applauds upROARIOUSly as another short delivery is knocked to the boundary).
Farah Al Zadjaly
This looks really good, had no idea about hiring such a managers. I guess it does make sense after all.
The Frugal Samurai
I agree, it does look really good! Hahaha, thank you Farah, hope you enjoyed it 🙂
Cindy
I had no idea property managers were so reasonable. We have been thinking of buying rental property, but it seems a little daunting. This helps!
The Frugal Samurai
It doesn’t have to be! Just keep being educated Cindy, and good luck with it, let me know if you have any questions – happy to help!
Trent A Peek
Interesting post. I am in a position in which I might have to rent my house for a year, and there is things here that I will remember when the time comes.
The Frugal Samurai
Please do, in fact bookmark it! I dare ya! hahaha, thanks for reading.
Dana Brillante-Peller
A friend was just talking about this with their brother-in-law. And it’s interesting how you have to decide what’s best for you and your budget.
The Frugal Samurai
Oh! And what was the verdict? Don’t forget the time factor as well Dana!
tweenselmom
It makes sense to hire a property manager if you have a property, big properties. Professional people can help manage tasks and costs efficiently.
The Frugal Samurai
Yes, this is so true, especially if you have a multi-property portfolio like you say – it could be pretty full on to look after.
Fae Celine
I think having a great property manager can be really helpful especially for convenience but for budget friendly option, DIY would be a great option, you just need to put more attention and focus. It just depends on the preference
The Frugal Samurai
Hm you’re right there! Depends also on whether you can be bothered and have enough time as well right! Thanks for reading Fae 🙂
MUDPIEFRIDAYS
This is such an great article. You have a very good point of view. And for me. I prefer DIY. because it’s save you cost. And bring more bright full idea in your own. Thanks for this awesome guide!
The Frugal Samurai
That’s quite OK – and yeah, if it works for you! Go for it!
ELIZABETH O
You decided it very well and very informative in each of one. I bet it’s nice to hire Manager if you own a big properties to deal with it. Thanks for this wonderful post!
The Frugal Samurai
Thanks for reading Elizabeth!
AMY
Bookmarked already! I really need this for my future options. But for now. I choose the DIY. It looks exciting choice.
Arunas
Informative and useful article. It would be really great to turn a property into a rental. I agree that “when you want something done right, you do it yourself”.
The Frugal Samurai
Yeah it would be Arunas, do you guys have many rentals over where you are?
Olya AMANOVA
There are many things to consider in cases like that. This post is a great help as it puts everything in order and now a person knows how to make a decision.
The Frugal Samurai
It sure is Olya! Glad you enjoyed it 🙂
Jasmine M
In my case, I feel like hiring a property manager would be better because I don’t know anything about managing a property myself. It’d be better to work with someone who knows the in and outs of the business for sure.
The Frugal Samurai
Yeah same here Jasmine, also completely clueless – just had a call from two of mine today! Gosh, can’t pay them enough right!
Kiwi
If you are overwhelmed it could be a great thing to hire a property manager.DIY can be good to help save on cost so it depends on the person.
The Frugal Samurai
Yeah true, sometimes though I prefer to save time and just hire someone, but get your point!
Jackline A
I know someone who owns properties and they have several property managers but they still have to do a lot of things that the property manager can’t manage. So it all depends on the situation.
The Frugal Samurai
Wow really? What things can’t the property manager manage can I ask? Genuinely curious to hear so I can be prepared myself!