Investing in a rental property can be one of the most lucrative ways to build a strong financial foundation.
However, being a landlord can be a very intimidating experience — especially if you’re already short on time with tons of other things on the go.
Although being a landlord might be up your alley, dealing with tenants and property upkeep duties may be more trying than you may think. That’s why many rental property owners hire property management companies to lend a helping hand.
If you’re thinking about doing everything yourself, you owe it to yourself to think about some problems you may encounter as an owner-landlord.
Here are four issues you might face as a rental property owner if you fail to hire a property manager.
1. Tenant Issues Can Drain Your Time and Attention
Tenant management can make being a landlord rather difficult. As a landlord, you’ll have to take care of the following:
- Showing vacant units
- Screening applicants
- Taking care of the rental units
- Entering into rental agreements
- Collecting rent
- Dealing with tenant issues
Remember that a bad tenant can waste a lot of your time. Late rent, noise disturbances, disregard for rental agreements, and last-minute repair requests are but a few things you’ll have to deal with.
The good news is you can rely on a property manager for help with all of the aforementioned. Such businesses have processes in place to maximize the potential of your investment property — and that makes the cost of hiring one worthwhile.
2. Maintenance and Repairs Can Become Stressful
A rental property requires upkeep, and problems will occur when you least expect them to. Failing to hire a property manager means you’ll have to shoulder responsibility for everything pertaining to your property and tenants.
You won’t just be on the hook for smaller jobs, such as repairing loose doorknobs, replacing smoke detector batteries, and performing various routine tasks. You’ll also have to roll up your sleeves to tackle many labor-, time-, and cost-intensive jobs.
It makes more sense to hire a property management firm that can handle all of these duties. You’ll save time and money — which means you can actually have a life.
Property managers know reputable contractors and will hire them at better costs and get faster turnaround times than you’d otherwise accomplish.
It’s no surprise that property maintenance can directly affect overall tenant satisfaction. A long turnaround time to repair a property can give a tenant enough reason to decline renewing a rental agreement. That can result in expensive turnover.
Without a property manager handling things on your behalf, taking care of property maintenance can literally become a never-ending job.
3. Legal Compliance Becomes Risky and Complicated
Being a landlord also means accepting a long list of legal obligations that can differ depending on where you’re based.
The most frequently encountered legal issues faced by rental property owners who handle landlord duties themselves include the following:
- Improper lease agreements
- Violations of local safety and housing codes
- Failure to give adequate notice about entry/tenancy cancellation
- Flawed eviction processes
- Failure to comply with fair housing regulations
- Absence of documentation on repair work and/or inspections
Landlord-and-tenant laws aren’t static. They’re hard enough to understand as it is — and they sometimes change. Breaking the rules, even if doing so unintentionally, can lead to costly fines and penalties.
Property managers know how to operate within these laws and keep up to date to make sure they’re within guidelines on everything, such as background screening, evictions, and walkthroughs. You can reduce the downside by working with a property manager.
4. Rent Collection and Financial Management Can Be Stressful
Rent collection should be a straight-forward process. And it often is. But that doesn’t mean things can’t get complicated fairly quickly.
These are some of the issues that could raise your blood pressure as an investment property owner:
- Late payments
- Partial payments
- Payment disputes
- Non-payments
If dealing with a tenant who is unwilling to pay rent, you’ll have to take matters into your hands. But going this route can be time-consuming. Dealing with tenants who treat rent as an option will have implications on your finances and your ability to pay things like your mortgage fees, taxes, and insurance premiums on time.
A property manager, meanwhile, can handle these unpleasant tenant issues. You’ll get your money without having to stress yourself out by handling everything yourself.
Managing your rental property independently could seem like one of the best ways to build income, but the reality is that it’s not always that simple. Getting help, even though it’ll cost you, will help you come out more profitable in the end.
A property manager can lighten your load while padding your pockets. If you want to succeed as a rental property owner, investing in the right help can help you get there.