There aren’t a lot of pros when it comes to managing your own rental property. Do you save some money by not paying a management fee or a leasing fee?
Sure. That’s the pro. Another pro would be that you get to maintain complete control over everything that happens to and at your rental property. Some landlords need that hands-on experience.
Some things should not be done on your own, however. DIY root canals, for example, are a terrible idea. We don’t recommend that you put new tires on your car unless you’re a mechanic.
Property management is best left to professionals as well, but there are an astonishing number of landlords who prefer to be DIY landlords.
We’re not saying it’s impossible. If you have a great tenant in place and everything is running smoothly, you likely feel as if there’s no need for a property manager. But, that’s the exception more than the rule. Just because you can manage your own property doesn’t mean you should. While it may seem like you don’t need the expertise of a Jackson property manager, you should take some time to consider the opportunity cost that’s at stake here. What are you missing? Could you be bringing in higher rents? Could you be making improvements that will increase the value of your property?
Property managers will help you succeed. We’ll help you earn more and spend less on your investment. We can also help you identify new investment opportunities that may help you reach your investment goals.
It may seem easy enough to lease, manage, and maintain your own rental property, especially if you only have one or two homes that you’re renting out. But, we’re going to take a close look at DIY landlording and whether it’s the right path for you.
DIY Jackson Landlords and Lost Earnings
A lot of the DIY landlords we talk to tell us that they don’t want to pay a property management fee. They see it as cutting into their cash flow and ROI. But in our experience, landlords who manage their own properties often leave money on the table, and they don’t even know it.
Here’s an example: how long is your average vacancy? It’s potentially longer than it should be, and that means you’re losing money.
If your property is vacant for weeks and months, you’re not earning any rent and you’re paying out of pocket for things like utilities. As property managers, we can quickly identify the likely reason that your property isn’t renting.
- Maybe the price is wrong and potential tenants are moving along to other homes that offer more for less.
- Maybe you’re not marketing your rental home in the right places. Are you syndicating your listing across multiple rental platforms? Are you utilizing social media?
- Maybe you can’t seem to schedule showings with prospective tenants because you don’t have time to get over to the property when they’re free and you haven’t thought to install self-showing technology.
Property managers keep vacancy rates low. We leverage our accurate, up-to-date data and property management analytics to price your property correctly. We implement strategic marketing plans, and we’re responsive when it comes to showings.
Sometimes, vacancies become so expensive so quickly that landlords become desperate to get a tenant placed. That leads to incomplete screening and unqualified renters. A very bad idea, because the wrong tenant can cost you a lot more than a property management fee.
Vacancy aside, you may also find yourself losing money on maintenance. Repairs are expensive, especially if they’re emergency repairs. Without access to a qualified list of licensed and insured vendors, you could overpay for those plumbing disasters that are waking you up in the middle of the night.
Property managers have relationships with local vendors that result in high quality, affordable maintenance. We’re able to negotiate the best rates from plumbers, electricians, HVAC technicians, landscapers, and cleaners because of the volume of work we provide. You can take advantage of those discounts by partnering with us. DIY landlords always pay more than property management clients.
Tenant Quality: DIY Landlords vs. Jackson Property Management
You only need to have one bad tenant experience. That will leave you wishing you either never became a landlord or that you had hired a property manager much sooner. DIY landlords who are leasing and managing rental properties on their own may not invest as much time or resources into attracting, screening, and placing high-quality tenants.
All of your screening needs to be compliant with the Fair Housing Act. You cannot pick and choose tenants based on how they look or whether they seem like they’re pretty similar to you. You need to remain objective, and that’s sometimes difficult for DIY landlords to manage. If you’re trusting your instincts instead of the data that’s provided in a screening report, you could be in trouble.
The tenant you place has a huge impact on the rental experience you have. Your tenants also impact what you earn or lose on your investment property. Good tenants contribute to your experience by paying rent on time, taking care of your property, and communicating openly about what is needed.
Unqualified tenants will cost you money because of:
- - Late or unpaid rent.
- - Lease violations.
- - Property damage.
- - Lease breaks.
Property managers know what to look for in a tenant, and we know what to avoid. You won’t have to worry about placing a bad tenant who won’t pay rent or follow your lease terms. You won’t have to worry about long and expensive evictions. A resident screened by Jackson property managers will turn out to be a profitable and pleasant tenant.
Risks and Liabilities for Self-Managing Landlords in Jackson
There’s always risk involved in any investment. Rental properties come with a lot of investment benefits, but there are inherent risks as well. After all, you’re renting a home to tenants, and that can become quickly unpredictable, even if they’ve been well-screened. There’s bound to be some liability.
This is one of the best reasons to partner with a professional property manager.
We just talked about tenant quality. A bad tenant is a risky tenant. Your property manager will have more resources for screening, protecting you from the risk that comes with an unknown person moving into your investment.
Other risk management things to think about:
- Are you requiring renter’s insurance? You should. If you’re not sure how to enforce this requirement, write it into the lease agreement, or get yourself listed as an additional insured, property managers can help.
- Do you know the difference between a pet and a service animal? What about an emotional support animal? You need to know the fair housing laws and the Americans with Disabilities Act (ADA) pretty well when you’re renting out a home. Violations are expensive.
- Do you understand the security deposit requirements and the timeline you must follow to return the security deposit? What will you do if a tenant disputes a deduction you make?
The risk that DIY landlords face can often be overwhelming. There’s a lot of liability when you’re choosing your own vendors, dealing with tenant complaints, raising the rent, or letting yourself inside the occupied property.
No one wants to think about all the ways that things can go wrong, but when you’re working with a property manager instead of doing everything yourself, there’s a lot more peace of mind. When a tenant stops paying rent, you risk losing a lot of income. If you don’t know the eviction laws, you’re also at risk of facing a long and expensive process of trying to remove the tenant from your home.
Property managers mitigate those risks.
Professional Property Management Resources and Technology
Technology is excellent for the efficient management of rental properties in Jackson, but it can also be difficult for DIY landlords to access. Property managers have gathered systems and processes that make leasing, managing, and maintaining your rental property more efficient and transparent. These systems have been perfected over an entire career of managing rental homes.
As a DIY landlord, you may struggle to find the best tech-driven ways to collect rent, conduct a move-in inspection, serve a notice, or negotiate a lease renewal. Property managers do these things every day, and we have the expertise and the resources required to make things effective and efficient.
We also have the benefit of innovative property management technology. With all the property management platforms and accounting software available, we can automate most of the processes in leasing and managing your home, providing a cleaner, more consistent, and transparent management experience. This leads to a better experience for you and your tenants.
Property management fees are tax-deductible. Ask any successful real estate investor, and they’ll tell you that professional Jackson property management is far better than DIY landlording.
Let’s elevate your game. Contact us at Lucroy Residential, and we’ll talk about how we can help you have a better and more profitable rental experience.
