Self Managed Vs Property Manager – Everything you need to know

Self Managed Vs Property Manager

Self Managed vs Property Manager

We will break down the costs and value of self managing your property compared to choosing a property manager to do it for you

By Faraaz Hashmi

As a customer-focused property management firm, we meet over 25 homeowners every month and one important talking point during our meetings is the difference between having properties that are self-managed vs homes managed by a property management firm. 

Before we get our hands dirty with the pros and the cons, let’s work out some numbers. 

The Time Factor

The first and foremost thing to be done is to put a $ value for an hour spent by you.

If you are a full-time employee, divide your monthly income by the number of hours you work per month. If you are a freelancer or a solopreneur, the calculation is even easier as you will know your hourly rates.

In Los Angeles, the average household income is $51538.

This is a gross number and it does not include taxes. For the purpose of calculation, let’s assume you are a single earner in your house, and you make $51538 per year and you work 40 hours per week.

Yearly Income – $51538

Approximate Monthly Income = $4294

Approximate number of working hours per month – 160

Hourly Income – $26

If you would like to calculate your approximate hourly income, you can use the calculator below.

Now that we know the $ value for your hours, we can dive into the value and costs of self-management vs property management. 

Your Profit Margin

Credit : Giphy

For a homeowner, the basic profit calculation every month boils down to the following simple equation. 

Monthly Profit = Rental Income – (Mortgage + Expenses)

The expenses entered in this equation is mostly the costs incurred for maintenance or repairs.

What is often overlooked in this equation is factoring the expenses in terms of your time and energy spent as a landlord in managing the property on your own.

Energy spent cannot be measured but the time spent can be easily measured.

Let’s say you spend an average of 8 hours every month to manage your property including trips to your property to collect rent, regular inspections etc.

Assuming your hourly income as $26, you are spending $208 every month for self-managing your property. If you have a couple of properties or more, this cost would go even higher. 

If you still think it’s right up your alley, here are the top four landlord duties you will be taking on when you self-manage your property. 

 1.     Maintenance

 This comes right at the top of the list as the need for maintenance can crop up anytime in your rental property. There is a difference in the way an owner treats his house compared to how a tenant treats the house he lives in. We’ve all been there. 

Apart from the routine maintenance checks to keep the appliances at good condition, you might also have to respond to emergency maintenance requests from your tenants.

 Importance: Let’s say you absolutely love your tenants. For you to retain the tenants, they have to be happy with the property. If they feel there is a delay in attending to their maintenance issues, they will start looking for a new place. This might affect your profits and mortgage payments even if the house remains vacant for just a month.

 Who does it better: Property managers have a significant(unfair) advantage when it comes to maintenance and repairs as they can get great discounts from service providers as they provide the service providers with job orders every month. You can save a lot on the maintenance costs when you work with a property manager.

 2.   Rent collection

On the outset, the collection of rent at the start of every month sounds like a trivial issue. The major cause of any rifts between the homeowner and the tenant is a delayed rent payment.

Instead of wondering why the rent cheque has not reached your mailbox or frantically calling your tenant who is on vacation, you can automate the rent collection using new-age applications.

Importance: Importance of rental income does not require an explanation.

Who does it better: If the homeowner does not mind following up with the tenants every month on delayed rent payments, the odds are just the same for both self-managed homeowners and property managers.

 

3. Managing the Vacancies

 A vacant rental property does not generate any revenue. As of 2018, only 4% of the rental properties are vacant in the Los Angeles – Orange County.
 
With limited supply and huge demand, this is great news for a homeowner as there are a lot of tenants looking for a home to rent. However, the competition is not only between the tenants but also between the homeowners (4%) in marketing their property as the best bet in the market.
 
Importance: When a property remains vacant for a significant period of time, the homeowner is at a disadvantage because he/she is losing money every month. Marketing a property today requires digital marketing skills too.
 
Who does it better: Property Managers have an edge because it is their day job and they are very comfortable in making the best use of modern day online real estate platforms. They have a huge network and they also work closely with tenants in finding them a rental property. They can play the matchmaker and get your property rented in no time. 
 

4. Tenant Screening

 Marketing a rental property is just half the job done. You will receive dozens of applications from tenants for your property. You will have to reach out to them and do your due diligence before you hand the keys to your property.
 
This can take a lot of time as you will have to perform credit checks, background history, job income, eviction history, verify previous landlord references etc. 
 
Once you are satisfied with the above, you will need to schedule the showing with all the prospective tenants. This takes a lot of time than the above three responsibilities.
 
Importance: Dealing with a bad tenant can be an emotionally frustrating experience. It is always better to vet and pick a good tenant as tenant retention and renewals becomes much easier in the future. 
 
Who does it better: If a property manager manages 50 rental units, he/she would have spoken to at least 300 prospective tenants to fill these rental units. This experience is invaluable, and their instincts will go a long way in picking the right cherries. As their day job is property management, they do not need to take time off for tenant showings. 
          
The above four points are the major factors that can impact your decision of taking the self-managed route or hiring a property manager. For the extensive list of the responsibilities of a landlord/ property manager, click here.
 

Final questions to ponder

 

1.    How far is my rental property?

If your rental property is far away from your home or work, you will spend a significant time commuting. Factor the time taken each way as well as the fuel costs.
 

2.    What is the level of support you may receive from your family?

If you can divide and conquer the responsibilities of property management amongst your family members, you are one of the lucky few.
 

3.    How much is your time worth?

Add up all the hours you will spend every month managing your property and multiplyit with your hourly income.
If the pricing quoted by the property management company is cheaper than that, it is worth choosing a property management company instead of self-management.
 

4.    What is your ultimate financial goal?

 

“It is better to work on your business than work in your business

If your ultimate goal is to attain financial freedom faster by multiplying your rental income by increasing the number of investment properties you own, you should focus on that instead of managing the properties.
 
When you spend a lot of time in managing a property and since it is a very demanding job, you might eventually lose interest in investing more in real estate. The time spent prevents you from working on any of your side hustles.
 

5.    Are you a process person?

Managing your property on your own requires a lot of processes to be followed to a T. If you are not a process person, you can outsource it to the right property manager and focus on rinsing and repeating your investment journey.
—–
 
At Skybridge Property Group, we make it even simpler by offering a pricing to homeowners that is unbeatable.
 

5.6% of your Rental Income or $98 per month (whichever is lower)

 
You can save a lot by choosing Skybridge Property Group instead of our competitors. We have done the research so that you that you don’t have.
 
Use the calculator to find out your Monthly savings in Property management costs when you work with us.

 

 

Job Description of a Property Manager

Property Manager Job Description

Job Description of a Property Manager - What do they do best?

Thinking of managing your property on your own? This article is a must-read for Home Owners. 

By Faraaz Hashmi

What does the job description of a Property Manager look like?

What does the Property Manager do?

I can manage my own property. Why do I need someone to do something I can do?

If you are a homeowner and you are pondering on the above questions, here is our detailed take on the responsibilities of a property manager. Let us look at them one by one.

 

1.    Property Marketing and Listing

Marketing a product / service in the modern day requires a lot of technical skills and targeted efforts. It is important to stand out in the market when there is so much competition.

It is the same for rental properties too. Tenants look for specific features and amenities when they are looking to rent a home. A property manager will make sure those terms are out in bold whenever it is listed on websites to attract qualified tenants.

It is not just for the tenants to find but also for algorithms to understand and list them in listing websites prominently. It takes a lot of time to master these platforms and play the game right.

Property managers know their way around these platforms as they use them daily to attract qualified tenants to fill vacancies in the properties they manage. It is best to leave it to the experts.

2. Setting the Rent

The Property Manager will be able to help you arrive at the right rent for your property depending on a variety of factors.

By choosing a fair rent, there are greater odds for attracting a good number of tenant applications for your property. They will analyze the location and see the similar properties and their rents to help you arrive at the magic number.

Every year, your property manager will also guide you in revising the rent according to the State and Municipal laws. 

3. Tenant Verification and Vetting

There are good apples and then there are bad apples. It takes a lot of time and efforts to screen through the list of applicants who have expressed interest in renting your property.

A good tenant is a godsend while a bad tenant can be a source of constant worry. Credit checks, reference checks, background checks – leave it all to the property manager. Their experience in this industry and their instincts will go a long way in finding the right tenants for your property.

Great tenants maintain your property like their own and finding such tenants require a special set of skills which are often mastered by expert property managers.

They are the ones who will be dealing with the tenants on behalf of you and so they will look for the best tenants for your property. 

4. Rental Property Showing

We are often in a race against time. 

“Wake up – commute – work – commute – rest – repeat”

Most of us follow this pattern everyday.

As a homeowner, it will be hard for you to be available at all times to show your property to prospective tenants. Especially when you are living away from your rental property, it is really difficult to do the showings. When you work with a property manager, they will take care of the showings on your behalf. They will save a lot of time for you and they will answer all the questions to tenants on behalf of you and as we all know, time is money.

5. Handling Tenant Concerns

Ever felt relieved after talking to a great customer service agent who solved your burning concern in a jiffy? Do you picture yourself doing the same to your tenant whenever they have a concern?

Handling concerns and solving problems immediately requires a lot of experience. Even if you have relevant work experience in customer support, we are sure you do not want to continue your day job even after coming home.

A good property manager is very resourceful and years of experience in property management has converted them into a ready-reckoner for any queries / concerns. They know the right people for every situation, and they bring them on-board to solve your tenant issues. 

6. Supervision of Repairs and Maintenance

“To err is human, to repair is divine”

Bad quote, right. It is completely natural for a home to require repairs from time to time. What may seem like a small deal to you (as a homeowner) may be the deal breaker for your tenant.

Practically speaking, you may take some time to fix things for your tenant. Every passing day will be a difficult experience for your tenant, and it will lead to friction between you and the tenant.

Enter property managers – they will handle the concerns without even bringing it to your notice. Preventative maintenance of the property to keep it functioning in top condition is one of the key responsibilities of a property manager. 

Property managers are often well connected with top-rated service providers in your locality and they will be able to get stuff done quickly at affordable costs as they will usually get better prices from service providers due to their volume of business from all the properties they manage. 

7. Rent Collection

Money is the most important element in any transaction. Collecting the rent on time requires follow-ups, reminders and lots more. Although most of the tenants will pay up on time, there are always exceptions. It is important.

A property manager will collect the rents every month on behalf of you and transfer it to you as a part of their contract. They will setup a system in place for collecting the rent every month. 

8. Handling the Accounting

This is a no-brainer. There are very few people who are gifted with the love for numbers. They become chartered accountants. Let’s talk about you. Maybe you love them too, maybe not.

How magical it would be to get everything sorted out when it comes to accounting without raising a finger. Property managers can do that for you. One of the major advantages of working with a property manager is the accounting taken care of.

9. Tenant Renewal

“It is far cheaper to keep an existing customer happy and retain them than looking for a new customer”

This is not just true with marketing and customer acquisition world. It holds true even for renting out your property. Great tenants need to be retained. This boils down to their experience of renting your property.

By hiring a good property manager who can address your tenant concerns quickly, the tenants will have a pleasurable and stress-free experience. This will substantially increase the odds of tenant renewal. 

10. Move-out Assistance

When a tenant moves out, the property manager is responsible for inspecting the unit thoroughly and checking for any damages to the property. If there are damages, they will deduct the appropriate charges from the security deposit to be paid back to the tenant.

Once the tenant moves out, they are responsible for cleaning the property and taking care of any needed repairs before they find a new tenant for your property. 

11. Tenant Evictions

There will be instances when things go south like the need for a tenant eviction. It may be because of unpaid rents or breach of contract. Property managers are experienced with handling such situations and they will take the essential steps to file and move forward with the tenant eviction.

12. Regular Inspection of the Property

Inspections lead to findings and findings lead to fixes. In your busy schedule, it is impossible to do inspections of your rental property regularly. Sometimes, you can save a lot of money in repairs and maintenance when you spot problems at the earliest.

Property Managers always schedule routine inspections for the properties they manage. They will bring any concerns to your attention immediately. These concerns when fixed immediately leads to happy tenants and stress-free tenant renewals. Not to forget, the savings of fixing it early.

13. Maintenance of Records

As a single point of contact for everything, your property manager will have a record of every transaction / update with regards to your property.

This includes income, expenses, inspections, leases, complaints, repairs and maintenance requests, maintenance costs, record of rent collection and insurance payments. This data will serve as a central repository of information on everything related to your property. 

14. Capital Improvement Ideas and Execution

Property Managers know exactly what the majority of the tenants are looking for. They work with hundreds of property owners in managing their properties and they speak to over a dozen tenants to find the right one for your property.

Since they act as the bridge between the tenants and the property owners, they understand both the sides of the coin. By making small fixes and improvements to your property based on their recommendations, your property can fetch you a higher rental income thereby increasing your returns considerably. 

Note: The exact responsibilities of the property manager may vary depending on the location, type of the property, their fee structure and terms of their contract.

At Skybridge Property Group, we offer full-service property management services to homeowners. We have over hundreds of satisfied homeowners who love working with us. You can check their reviews here.

Cities and Neighborhoods we serve : Long BeachSanta MonicaCosta MesaWest HollywoodEast Los AngelesAnaheimYorba LindaAliso ViejoBrea and Dana Point

Property Manager Job Description
Job Description of a Property Manager