Posted October 24, 2022 | by Portsmouth Residential
Cost of Self-Managing your Property
More and more investors are finding that rental properties are suitable investments for long-term growth. A consistent cash flow, capital appreciation, and tax breaks have helped many people achieve great wealth and stability in retirement. However, unlike investing in stocks, real estate investing requires a significant amount of hands-on management.
When it comes to property management, there are two options: self-management or hiring a property management firm. Both have their own pros and cons, and the decision ultimately comes down to what works best for you. This blog will look at the cost of self-managing a unit and what goes into it. May this information help you make an informed decision about how to manage your rental properties most efficiently and effectively!
To determine what option is best for you, let’s review landlord responsibilities, property management tools, and other costs associated with self-managing your investment.
So, you want to self-manage…
Handling Property Vacancies
If your rental unit becomes vacant, you will need to find a new tenant as quickly as possible to minimize income loss due to vacancy. This process includes advertising the unit, showing it to potential tenants, cleaning the unit and dealing with repairs in-between renters as well as processing new applications.
You will need to screen tenants to find qualified renters who will take good care of your property. This process includes conducting credit checks, collecting, and reviewing financial documents, completing previous landlord reference checks, and more. This process will be easiest with the use of property management software.
Challenges in Collecting rent / Leasing
You will need to collect rent from your tenants every month. This can be done through an online portal property management software or done in-person. If a tenant fails to pay rent or violates the lease terms, you will need to handle the eviction process. This can be a lengthy and stressful process.
Upholding the Lease
When enforcing the lease, it is your responsibility to implement the lease terms, which include collecting rent on time and dealing with any issues that arise from the renter. You will need to remain available to respond and perhaps present yourself at your building if your resident loses their keys or is locked out. Ontario’s Standard Lease
Dealing with repairs, maintenance and damage
You will need to handle all repairs and maintenance that are required at the property. This includes finding reliable vendors and suppliers in your area to address items such as broken windows, lawn mowing & snow removal, painting/drywall repair, plumbing repairs, HVAC (heating, ventilation and air conditioning) maintenance and repairs, etc. In some cases, major repairs are needed, and invoices may be billed back to renters.
Enforce rules and regulations within the property
You will need to enforce the rules and regulations of your rental property. It is important to make sure that your renters follow the rules to avoid any problems, and to employ a thoughtful approach to rectifying these breaches before or as you engage in the eviction process.
You must be familiar with the Residential Tenancies Act (RTA) and the Landlord and Tenant Board (LTB), including the eviction process, to ensure legal compliance. At some point, you will likely have to deal with renters who require eviction. Reasons for eviction can include anything from noise complaints to property damage to non-payment of rent.
Online Tools Expense
There are various online tools available to help homeowners manage their investment properties. While some of these tools are free, most require a monthly subscription fee. Here are some helpful tools to consider when self-managing your property:
- Property Management Software: This software helps property managers keep track of their properties, tenants, and finances.
- Rental Listing Websites: These websites allow property managers to list their rentals online and reach a wider audience of potential tenants.
- Online Payment Systems: These systems allow tenants to pay rent online, making it easier for property managers to collect rent.
- Maintenance Request Systems: These systems allow tenants to submit maintenance requests online, making it easier for property managers to track and resolve issues.
Factors to consider in Property Management Cost
1. Number of units you manage. If you only have one rental unit, the cost will be lower than if you had multiple units. This is because the time and effort required to manage multiple units is significantly higher.
2. Location of your rental property. Time and effort to travel to the property more often to take care of any problems that may arise.
3. Rental property condition. If you have responsible renters, your rental property will likely be is kept in good condition. However, we recommend you still perform semi-annual inspections to ensure your property is in good condition. If your renter complains about a repair, you will need to take care of it according to the terms of the RTA and LTB.
4. Time and availability. If you have a lot of free time, there’s more for you to dedicate time taking care of your rental property and other tasks attached to it.
Being aware of these factors and responsibilities helps to give you realistic expectations, helping you make an informed decision about whether self-management is right for you.
Property management costs can vary depending on the services needed and the company. Before an individual decides to self-manage or hire a property management company, it’s essential to understand what goes into managing rental properties. If you are not familiar with these tasks, it is recommended that you hire a property management company. The cost of self-managing your rental property can be high, but it may be worth it if you have the time and ability to do so. The decision of whether to self-manage or hire a property management company comes down to what is best for your unique situation. If you’re considering self-managing your rental property, it’s essential to understand the cost and what goes into it.
Property management is a vital part of being a landlord. It can be costly and time-consuming, but it is essential to understand the ins and outs before deciding. Weigh the pros and cons before deciding to ensure that you make the best choice for your situation.
October 24, 2022 2:15 pm
Categorised in: How To, Rental Property Investments, Tips