In the previous post, we explained the different areas of the rental property that needs to be handled. Now you can determine how you want to manage these aspects, and there are three main approaches you should consider.
We would further explain into details each step, helping you understand this complicated, but easy to understand structure. Depending on your involvement and ability to dedicate your time and work hard, property management shouldn’t pose an issue for you.
So, here are a top three priorities you should focus on:
Do it yourself management
This approach requires your 100% responsibility, meaning you are in charge of everything. That’s why it’s called DIY. You are the one who is collecting the rent, making the repairs, or shoveling the snow.
This approach has a couple of pros, but also several drawbacks.
Let’s focus on pros first!
Complete control – as a rental property owner, you have total control. When you are completely involved in a process, then you know what’s going on in all parts of your business.
You and solve problems quickly – considering you have your hands in all parts of the management, you can spot the problem right away and act soon. However, since you are in charge of all the things, maybe you won’t have time to tackle the problem immediately.
Lack of knowledge – it’s impossible to know everything. For instance, if you have hired an accountant to do your taxes, he might have caught several deductions that you aren’t aware of.
It can be overwhelming – after some time, and too much stress, you might become anxious, since you are responsible for everything.
Half DIY/Half Outsource
It’s okay to ask for help, especially if you are managing a large rental property. For example, you can keep the areas that you feel you have an expertise, and then outsource the areas that you don’t feel comfortable or desire to manage.
Free time – when you are not doing everything, you will have more free time. However, how you use the time, it’s entirely up to you. You may spend precious moments with your family, or find additional investment opportunities.
Have experts – you are giving up the control to people who are more skilled than you in certain areas.
You are relying on others – this is probably the worst part for the majority of rental property manages. You are putting your trust in people you don’t know.
Outsource management completely
This management strategy involves hiring a property manager or property management company. Many owners feel like they should use their strength in a property selection, then in handling daily operations.
Independence and freedom – you will be free from daily headaches, and you won’t have to handle the phone calls in two in the morning just because the next door neighbor is playing the music too loudly.
Expensive – property managers can cost you tens of thousands of dollar a year. The more rental units you own, the bigger the price will be.
Management can harm your business – when you are putting your business and your only source of income into someone else’s hands, you better find a responsible and reliable person. Otherwise, your business may suffer, resulting in losing the tenants. Make sure to have a clear strategy and rigorous application process, to avoid further inconvenience.