Landlord vs Property Management Company:
As a landlord, you have legal responsibilities to the property and to the tenant. Depending on where the property is (which state, also which building or complex – if the property is not a single family residence), these responsibilities may differ. Prior to buying the property – if not a SFR – you need to review the association’s documents that pertain to investor-owned properties. Sometimes there are limits for how many units are able to be rented/leased at any given time (often a maximum rental rate of 20% - 30% of the total number of units), and sometimes the complex will offer to manage the rental property on your behalf for a fee. When managing your own property, you will be on-call all day, and if the washing machine overflows or the gate comes off the hinge, you will be the contact person as well as the monthly check collector. Also consider your opinions on confrontation; are you willing to evict a tenant if necessary? Pursue back-payments? Not all tenants are responsible so protect your interests as much as you can.
Property Management is a growing industry, where a licensed and insured group will advertise the property, qualify the tenant, and collect payments on your behalf. Some companies charge a flat fee for this service, others offer the services a la carte and charge for each portion. If you are considering hiring a property management company to handle your individual property or your entire portfolio of rentals, ask them about maintaining the property. Whose responsibility is it to make sure the hot water heater is working, and that the tenants aren’t damaging the premises? Negotiate the fees and terms whenever you can! You’ll be surprised to know how often you can get a discount if your property is in a desirable location, or in fantastic condition.
If you want to maintain as much contol over your property as possible, you can hire out parts of the management process, and retain the rest. For example, there are many local and on-line resources that will run a credit check on a tenant; respond to basic service requests for a nominal charge; clean and examine property between tenants, etc. It may be worth your time to investigate these service providers if do not want to outsource everything.
