Here's some food for thought when creating a system for managing your rental property.
Owning a rental property is a serious undertaking. It is not easy to provide a home for someone while also making good business decisions - doing both of these well is a requirement for success.
Landlords come in all shapes and sizes from all walks of life. Everyone’s situation is different and therefore there is no one-size-fits-all approach to managing rental properties. Some landlords thrive in managing every aspect of their rental business themselves. Some landlords want nothing to do with managing their rental. And of course, there’s everything in between.
Self-Manage / DIY
Some rental property owners see only one way to manage their rental portfolios: by themselves! While not for the faint of heart, going it alone means you can control costs and (if properly executed) create one of the most profitable systems.
Self-managers do have access to a strong ecosystem of technology that automates many elements of rental management - listing the property, collecting applications, screening tenants, collecting rent, providing a lease, and more. These tasks are made much easier via landlord software tools like Cozy, Avail, TurboTenant, and Rentec Direct.
Maintenance and property-level support for tenants is something that can’t be completely solved by technology - someone still needs to go to the property to fix the sink or help the tenants with the thermostat. These tasks will fall on the DIY landlord to either complete themselves or find people to do it for them.
If you’re interested in being hands-off, a full-service property management company will take care of everything. From finding and screening tenants, to collecting rent, to facilitating maintenance and repairs. As you can probably imagine, this comes at a cost. Typical property managers will charge a fee to find tenants (50-100% of one month’s rent) and a fee for the ongoing management (monthly fee of 8-12% of one month’s rent). The monthly fee doesn’t include any maintenance or visits to the property. In today’s rental environment this means thousands of dollars a year in fees.
While there are great property managers out there, many are stretched thin. The main knock on property managers is not giving each property the attention it requires.
There is enough technology and services out there to create a hybrid strategy that works for a landlord’s particular situation. Going this route offers flexibility, cost-effectiveness, and being largely hands-off (if desired). Let’s break down how and where a hybrid strategy can be developed across the main elements of managing a property:
Finding and Screening Tenants - landlords can use the software solutions listed above or they can hire a property management company that provides this service a-la-carte.
Rent Collection - another task landlord software companies can provide.
Ongoing Management - RentalRiff provides a unique service where a landlord can hire a Property Specialist (licensed/insured contractor) to provide on-call maintenance, tenant support, turnovers, assistance with showings, and serve as the main point of contact for tenants.
Most landlord software tools are free to landlords and RentalRiff charges a fraction of the cost compared to a property manager (and we have plans that include maintenance costs). This hybrid approach will be similar in profitability to going the DIY route.
Again, there isn't a one-size-fits-all solution. Every landlord should assess their situation and determine the best plan of attack. The good news is there are options available. Feel free to reach out anytime with questions!