Putting your rental property on the market can be a stressful experience, especially if you haven’t been a landlord long, or you just don’t like doing all the legwork. However, there are pros and cons to using a property manager.
While most of the benefits come from hiring a property manager, there are a few pros to doing everything yourself. Here’s what you need to know.
Renting a property without a manager is hard work
The biggest point in favor of hiring a property manager is that they’ll do all the hard work for you. For instance, Green Residential, a Texas-based property management company located in The Woodlands, handles everything for its investor clients. From tenant screening and rent collection, to advertising and marketing, everything is covered.
When you rent your property on your own, you’re in for a challenge. You need a wealth of legal knowledge because if you don’t follow the rules, you can end up in big trouble. For instance, you have to adhere to strict advertising rules, which means you can’t say things like, “perfect for single men” or “ideal for college students” in your ads because that can be interpreted as you having a discriminatory preference based on age or gender.
Other areas that can get you in trouble with the law are vast. For example, your lease needs to be valid and can’t contain illegal clauses. Unfortunately, a lot of new landlords include terms in their lease that are not legally enforceable and this can get you sued. If your clauses are found to be discriminatory, you can expect to pay a hefty judgment to your tenant.
On top of needing to know the law, you also need to manage applications, screen tenants for their credit history, run background checks, and then meet with them to show the property. All while trying to decide who is the best fit for your unit. This takes a lot of time and energy, not to mention knowledge. And there’s a chance that by using AI-powered screening tools to make things easier, you could still end up in trouble if the system produces inaccurate flags.
It’s cheaper to rent your property on your own
When you aren’t paying for professional property management services, you’ll save money. This can be a huge benefit if you don’t have the extra cash for professional services, or if you’re just renting out a room in your home.
However, saving money on service fees won’t necessarily save you money in the long run. Property management services can actually save you more money in the long term by helping you avoid costly mistakes and minimizing vacancies, among other things.
With that said, if you’re on a tight budget and can’t afford professional property management services, renting on your own is a good option.
The rules are sometimes different
There are sometimes different rules for landlords who rent properties with or without the use of an agent, and some of those differences are huge. For example, with the exception of advertising rules that must be followed by all landlords, some landlords are exempt from portions of the federal Fair Housing Act.
This includes landlords who rent single-family homes without using an agent (a property manager) and own no more than three single-family rental properties, a dwelling with four or fewer units where the owner lives in one, and religious organizations and private clubs.
If you fall under the exemption, this means you don’t have to legally accept service animals or emotional support animals (ESAs). While this is neither good nor bad, it does put a hefty responsibility on you when dealing with potential tenants.
Many tenants don’t know there are exemptions to the Fair Housing Act, and even if you try to explain it to them, they won’t understand. There’s a good chance you might get sued by a tenant even if you legally deny their service animal or ESA. It’s generally good practice to allow them regardless, because they’re a literal lifeline for many people. However, if you have a reason not to, then you can expect a lawsuit at some point. This is where renting on your own turns into a downside because you’ll have to go to court to prove your case.
Property managers make life easier
At the end of the day, it’s tough renting your own properties, staying legal, and handling tenant needs. Hiring a property manager will make your life easier by keeping you profitable and maintaining happy tenants.
