If you are the hands-on type you might want to handle your rental property on your own. The main advantage of this is that you are not going to be giving away a portion of your monthly rent to the property management company. This doesn’t necessarily mean that you will be saving any money in the long run, however. There are a lot of hidden costs and concerns to consider when renting out a property.
Filling Vacancies
It goes without saying that you must fill any vacancies in a rental unit. You won’t be making any money if you don’t have a tenant, but finding a good tenant can be a lot of work. If you hire a property management firm, they do the work for you but if you are going the DIY route there are quite a few things you have to do.
Set the proper rent: You must ensure that rent you are asking for is set properly for the amenities available and the location. If you set it too high, it will be difficult to attract tenants, too low and you will be losing money each month. The management company will have data and experience to help you with this process.
Advertise: You need to let prospective renters that you have a vacancy. This can mean running newspaper ads, online postings, and other postings. Knowing the most effective avenues to advertise can help a lot. A property management firm often can take out ads at a much cheaper group rate, and has experience knowing the best ways to advertise.
Background checks: Before you rent your property, you should do a background check on any prospective tenants. It is also a good idea to take a look at their credit report. If you are going the DIY route you will have to do all this yourself.
Maintenance
There is no way around it. A rental property must be maintained, both to preserve the value of your investment and to stay on the right side of the law.
Basic Repairs: Something always needs work, whether it is a worn-out lock, broken window, or malfunctioning appliance. In between tenants, some basic repairs like filling nail holes, painting, or replacing carpet will be necessary. If you aren’t comfortable fixing these things yourself you will need to call a contractor or handyman. These small repairs can add up. When dealing with a property management company, you will have access to their in-house maintenance staff.
Rent Collection and Evictions
No matter how well you check prospective renters, you may find yourself in a situation where you are owed rent or need to evict a troublesome tenant.
Rent collection: It isn’t fun to have to bang on doors and send nasty letters when you are owed rent but that is part of being a landlord. Letting a company handle this makes them the “bad guy” and allows you to collect on your investment with less headaches.
Evictions: Evicting a tenant is a huge hassle, and it must be done properly to avoid a lawsuit. You may even find yourself wasting time in court to resolve an eviction, or you can let your property management do it for you and avoid this trouble in the first place.