Should I hire a property manager or should I manage my own rental properties? In this video I'll walk you through the pros and cons of hiring a property management company or taking the DIY property management route. I'll also give you property management tips and tricks.
If you want to hire a property management company I'll show you how to find a good property management company and how to hire a good property management company.
I'll also give you a third option if you want to use a hybrid of these two options.
DISCLAIMER:
WITH ANY AND ALL INVESTING YOU SHOULD ALWAYS OBTAIN INDEPENDENT LEGAL, TAXATION AND FINANCIAL ADVICE FROM A LICENSED PROFESSIONAL BEFORE INVESTING ANY OF YOUR OWN MONEY.
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Managing Your Own Properties
Pro #1 - You get to learn all about property management and how it works. If you end up hiring someone in the future, you've already got the necessary knowledge on how things should and could work
Pro #2 - You can save money. Property managers are usually paid anywhere between 6-10% of the gross revenue the property brings in every month so if you're doing it yourself there could be savings here.
Pro #3 - You control your business. The success of your business will depend on you and you alone.
Con #1 - You are the first and only line of defence against your tenants. You will have to take calls in the middle of the night, and be their primary contact.
Con #2 - This will take you time... and time = money.
If you want to manage your own properties here are some tips for you.
Tip #1 - Learn all of your local rules and regulations. Each province and state has a separate set of rules that landlords and tenants must abide by. Make sure you know the rules inside and out.
Want to manage your own properties? Take the quiz - write your answers in the comments section below.
Question #1 - Can you evict tenants in the middle of the winter?
Question #2 - Can you ask a tenant how old they are?
Question #3 - Can you evict a tenant if they get a pet and specifically says they can't have pets in their lease?
Tip #2 - Pay yourself as a property manager. Take 6-10% of the revenue you bring in on a monthly basis and pay yourself as a property manager. This accomplishes two things. One, it's a write off for the property so you'll pay less tax and if and when you decide you want to hire a property manager you'll already be used to paying that 6-10% and it won't affect your cash flow.
Tip #3 - Use Reciprocity. Reciprocity is the idea of giving and taking. On the day my tenants move into the property I give them a $20 gift and throughout the year I like to touch base with my tenants and with a small gift let them know I appreciate them as my customers. This will not SOLVE ALL OF YOUR PROBLEMS but it does help create a relationship with you and your tenants.
Tip #4 - Make sure you do your rent increases each year. Every province has different guidelines when it comes to rent increases. Follow the rules and regulations and give those rent increases because I can almost guarantee your costs will go up each year as well.
Tip #5 - Never represent yourself as the owner of the property. You are always the property manager. This gives some much needed separation between you and your tenant and will help in cases when there is an ask or dispute.
Hiring A Property Manager
Pro #1 - They should already have systems in place such as accounting, tenant management, yearly inspections and preferred tradespeople.
Pro #2 - They may be able to get higher rents. Based on proven marketing strategies and negotiating tactics a property management company may be able to get higher rents.
Pro #3 - There's a level of separation between your and your tenants. This will help from a liability perspective and also from how many things you'll actually have to deal with.
Pro #4 - You get to focus on your strengths and free up more time to do what you do best as an investor.
Con #1 - The property management company will ALWAYS act in their best interest in the case of a conflict.
Tip #1 - Know what you are responsible for and what they are responsible for.
Tip #2 - Get a rental guarantee when you can.
Tip #3 - Read the rental contract.... every single line
Tip #4 - Make sure the company you choose has a web-based digital system that you can keep track of everything.
The HYBRID option
Pro #1 - You get to control more of the process.
Pro #2 - You get to manage all of your finances.
Con #1 - You will have to deal with staff turnover and may have to train new people sometimes.
Con #2 - It will still take up some of your time. More so than hiring a property manager outright.
Tip #1 - Teach your people your system and make sure they follow it to the letter.
Tip #2 - In the beginning, make sure you review everything. All documents and communications should flow through you
7 июл 2024
