When you have an investment property, are you going to hire a professional property manager or do it yourself?
We talk to over 100 self-managing owners every year, and they usually reach out when they’ve run into a problem. We do our best to point them in the right direction, but the problem is usually one that’s created by self-management.
Losing Rent and Keeping Bad Tenants
Many times, self-managing landlords turn the operation over to a professional because they are tired of doing it themselves. Others may think they are doing a good job with management, but they realize that they’re renting the property at a price that’s way under market, and they’re tired of losing hundreds or even thousands of dollars a year. Fear of losing tenants often result in bad tenants being left in place.
We see self-managing landlords hang onto tenants that we never would have placed and definitely would not keep. Maybe the property isn’t well-maintained but owners know that looking for a new tenant would require them to make some necessary repairs. They’d rather defer the maintenance and keep a bad tenant. That’s not a good idea. The maintenance issues only get worse, and then the property has to be dealt with.
That’s when they call us.
Rent Collection and Turnover
Usually, professional property managers do a better job collecting rent and enforcing the lease. Self-managers tend to be too lenient with rent collection, and more tolerant of slow payments. This may be because they have an emotional connection with the tenant, and they don’t want to come off mean or cold or nasty. That’s unfortunate, because you need to treat your rental property like a business. Otherwise, you’ll face hardship and headaches.
Self-managers also tend to take longer to inspect a home, and they’ll take longer to get estimates and turn it over. At Service Star, we take an average of 10 days to turn a property over from one tenant to the next.
Property Management Fees vs. Losing Money as a Self-Manager
Compare the fees you have to pay a professional property manager to the money you lose on things like lower rent, high turnover, longer vacancies, and deferred maintenance. Often, one month of lost rent will pay your management fees for a year or two. Property managers can assess the market and help you settle on a higher rental rate. We have the tools to effectively market your home and get the word out that you have a great property for rent. We’ll attract more applicants, and that means you end up with a higher quality of tenant. We’re also a lot stricter than landlords who self-manage. We can afford to turn away applications, screen more thoroughly, and insist that rent is paid on time. We run your property like a business. There is no emotional involvement on our end.
People do have success at self-managing their Phoenix rental property, but in the long run, it’s often more expensive not to have a manager than it is to employ one.
If you have any questions about Phoenix property management, we would be happy to help. Contact us at Service Star Realty, and we’ll watch over your investment home.