Underpricing, legal risks, and endless tenant calls are just a start. The 10% management fee might be cheaper than the hidden costs of doing it all yourself.
Are you really saving money by managing your own rental property? A lot of owners do because they want to avoid the 10% management fee, but the truth is that hidden costs can add up fast. Here’s what I’ve learned about the real cost of self-managing a rental.
Underpricing your property. Most people renting out their own property end up charging less than it’s really worth. It’s kind of like having a Rolex and selling it at a garage sale; you’re never going to get the same price you’d get at a reputable jewelry store. But when your rental is marketed through a professional company, it rents for more than it would on its own. Managing it yourself almost always means an automatic discount.
The cost of your time. Late-night maintenance calls, learning the laws, or making mistakes with the laws—these are big issues. Tenant screening also comes with a lot of regulations, and if you don’t handle it properly, you can get into trouble. Chasing rent is also one of the worst parts.
"When your rental is marketed through a professional company, it rents for more than it would on its own."
Listening to stories, deciding what to do about them, and staying up late worrying about why someone hasn’t paid you takes a lot of time, and time is money.
Scaling challenges with multiple properties. If you’ve got more than one rental, it gets even tougher. Property management companies can do things you can’t easily do alone. They have people working at different pay levels, they use technology, and they take advantage of economies of scale. That means they can hire runners to pick up signs and handle a lot of the small tasks at the absolute lowest price.
If you’re managing for fun, you’ll definitely learn lessons along the way. But my recommendation is always to at least talk with a property management company. Your time is valuable, and the hidden costs of self-managing often outweigh the fee you’re trying to save.
If you have questions about property management, just reach out to me at (210) 802-9959 or send an email to info@peaceofmind.co. I’d love to go over any of this with you and explain how it works.