Almost half of all US landlords hire property managers to oversee their rentals, and for good reason. Self-management can become overwhelming quickly, whether you're a seasoned landlord or not. Before taking on property management, it's essential to understand the risks involved to make an informed decision.
1. Poor Tenant Screening
Conducting proper tenant screening is crucial for maintaining smooth operations and protecting your investment property. Self-managing your rental property means you'll use your own screening criteria, and missing a key aspect of the background check can lead to subpar tenants and other potential risks, such as property damage.
2. Legal Non-Compliance
It is your responsibility to be aware of the relevant laws to minimize legal risks. Some legal requirements and federal regulations are easy to remember, such as tax compliance and the Fair Housing laws, but there are many more to abide by for legal compliance. You can always consult a legal expert, but it could be much easier to hire a professional property manager to help you avoid legal issues.
3. Lenient Lease Enforcement
Lease agreements are legally binding contracts that enable property owners to establish clear rules and enforce consequences for lease violations. However, some landlords can sometimes be too strict or too lenient. Being lax can lead to continuous bad behavior, whereas being too strict can negatively impact tenant relations. A good property manager will know the balance between the two.
4. Inconsistent Rent Collection
Self-managing rental properties can lead to inconsistencies, such as late rent payments. Some tools can make financial management easier, or you can hire a property management company with an in-house tenant portal to make payments more convenient. Specific tools even allow you to automate tasks like issuing late fees when tenants fail to pay monthly rent on time.
5. Delayed Maintenance
Addressing property maintenance issues is at the core of property management. In addition to routine maintenance, you must also respond to maintenance requests and coordinate with reliable contractors for necessary repairs. If you have a few properties in your portfolio, it would be better to delegate this task to a property management team with access to a network of vendors. Otherwise, you may end up with unresolved property issues and unhappy tenants.
6. Vacancy Risks
Vacancies can turn into a financial nightmare when prolonged, as occupancy is a rental real estate investor's primary source of rental income. If you don't know how to market your listings effectively, self-managing your rental property might not be the best idea. A rental property management company can use the right tools and tactics to maximize your rental's exposure to the target market.
7. Landlord Burnout
Experienced investors recognize the workload that comes with being a self-managing landlord. It is time-consuming to manage tenants and operations, to the extent that you may have very little time left for your personal life. With burnout comes inefficiency, and that can eventually lead to decreased property value, negative cash flow, and costly mistakes.
What You Get From a Property Management Company
Self-managed properties can thrive without assistance, which is the case for many rented households in Jacksonville. However, giving up direct control of your own property and opting for a professional property management company comes with a plethora of benefits, such as:
- Cost Savings: Although you may incur property management fees, expert management can lead to increased income, which can help offset your expenses.
- Avoiding Liability Claims and Disputes: Vigilant management, maintenance, and repairs will be addressed promptly, allowing you to avoid potential legal defense costs.
- Passive Income: Real estate investing doesn't necessarily mean you have to manage your own rental. By entrusting it to property managers, you can be a stress-free landlord and earn without lifting a finger.
These are just a few of the many benefits that come from hiring companies like Green River Property Management. Contact us today to learn more about how our services can benefit your property.
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