Landlord Best Practices - Trying to determine if you should hire a property manager or self-manage? Here are some things to consider.
As a landlord sometimes it’s difficult to know whether to hire a property manager or to manage yourself. Property managers are pricey and can eat into your profitability but they can also relieve some headache (although sometimes they cause headache). Self-managing is becoming much easier with technology and services like RentalRiff.
Here at RentalRiff, we believe our solution finds a great middle-ground and couples well with free landlord software like Cozy or TurboTenant. This combination provides almost all the services that a property management company can at a lower cost while being considerably more efficient and streamlined.
Some property owners want to be completely hands-off with their rental. That is understandable! Landlording is no small task. While property management companies can provide this, they are often stretched thin and require lots of “involvement” from property owners.
Here are a few of the downsides to working with a property management company:
One of the big issues we find with property management companies is that their goals are not aligned with the property owner’s goals. We see this most evidently with leasing services - property management companies are financially incentivized to turn over your rental as often as possible because of the large fee they collect for finding new tenants (usually 1 month’s rent). Obviously, this is counter-intuitive for a property owner who doesn’t want any vacancy, doesn’t want to pay that fee, and wants to keep good tenants in the unit.
Another downside to leveraging a property management company is that the high monthly fee (usually 10% of rent collected) does not include any maintenance or labor. If the toilet breaks the property owner still pays for the maintenance person to go to the property and complete the fix (labor + materials). Granted the property manager will facilitate this on your behalf.
Finally, property management companies are renowned for additional fees. Some have clauses in their contracts (which, by the way, are long and difficult to get out of) stating that if you sell your property during a lease they are the de facto listing agent and will collect the 3% brokerage commission. Other fees can include early cancellation fees, set up fees, vacancy fees, and many more.
In contrast, looking at the combination of landlord software and RentalRiff, the cost is $150/month (for a single family home), which includes maintenance work while still being hands-off. Property listing, marketing, rent collection, tenant screening, a point of contact for tenants, and maintenance are all included with no additional fees. No long-term contracts and no incentives to replace your tenants.
We’re happy to chat anytime! RentalRiff Contact Us