NEW YORK, NY / ACCESSWIRE / September 30, 2024 / Owning rental properties can be an excellent source of income as well as a satisfying investment opportunity. But once you purchase a property, you'll need to decide if you'd prefer to handle day-to-day management or outsource it to a property management company. While there are obvious financial considerations, perhaps ones best reviewed alongside a financial advisor, there are other aspects to assess to help you decide. Here are six pros and cons to consider if you're thinking about self-managing your rental property.
Pro: Closer relationships with tenants
Should you choose to self-manage your rentals, you'll be responsible for fielding applications, interviewing tenants, and ultimately deciding who lives in your property. This closer relationship may be helpful since you'll likely have more trust in the person or people living on the property and paying rent. However, you'll want to establish clear boundaries with tenants to ensure there is mutual respect regarding how and when it's appropriate to report issues.
Pro: Potentially lower management costs
By self-managing your rental property, you can save on having an outside property manager on the payroll. This can help you to assess exactly what the management costs are, from upkeep to routine monthly expenses. Then, you can decide how to use the money saved, whether it will go into your pocket or if you'll choose to put it back into the property for repairs and renovations.
Pro: Awareness of your investment
When you opt to self-manage, you'll be more aware of how your rental property fits into your overall portfolio of investments. You can work with your financial advisor to regularly review the benefits, risks, and expenditures relating to your rental property. Keeping a tighter handle on all aspects of your real estate investment can keep you well-positioned to make changes that are most beneficial for you financially down the road.
Con: Property upkeep
The upkeep, repair, and maintenance of the rental property falls squarely on you when you choose the self-management route. While this doesn't necessarily mean you have to fix a leaky roof or replace heating or cooling systems on your own, the onus will be on you to either fix them or outsource to a professional who can handle such issues in a timely and efficient way to guarantee the safety and well-being of your tenants.
Con: Conflict resolution and legal matters
As a self-manager, you will be relegated to handle all conflict resolutions, whether they are squabbles between tenants, issues between yourself and the tenants, or ever larger things like evictions should those become necessary. You will also need to be aware of laws, insurance policies, inspections, and other tenant-related guidelines and be ready with documentation and proof of legal compliance across the board.
Con: Exhaustion and burnout
Unlike working with an outside property manager or company, you will be the go-to person on call for any issues that arise. While this can lead to more productive tenant relationships, it can also mean that you might face exhaustion, burnout, and frustration about the demands put upon you. That said, it can be a learning experience as you get to know the ins and outs of your rental property, but it is important to go into the self-managing process with clear expectations.
Be realistic about the responsibilities
The choice of whether to self-manage your rental property or outsource to a property manager or company is a significant one. If you choose to handle things yourself, it's critical to be upfront and realistic about the demands and frustrations. Setting fair expectations from the start can position you well for a more understanding relationship with tenants and yourself as challenges arise.
Contact:
Don Klein
1-800-323-7033
SOURCE: Northwestern Mutual
View the original press release on accesswire.com
