If you’re renting out a property for the first time, or an experienced investor who has a growing portfolio, you might be wondering whether it’s time to hire a property manager. Should you lease, manage, and maintain the investment on your own, or partner with a professional who has experience, knowledge, and resources?
When you do it yourself, you need to start with the early details: preparing the property for the market, acquiring the necessary insurance, and making sure you have a reserve fund to cover unexpected maintenance costs, vacancies, and other potential expenses.
With the help of a Los Angeles property management company, there’s not a lot of heavy lifting for you to do yourself. This is the one of the many benefits to working with a management company.
For some rental property owners, it’s an easy decision. Real estate investors aren’t often interested in managing the logistics and dealing with their tenants. Landlords, however, sometimes prefer to remain hands-on when it comes to their property.
The best choice for you depends on your level of expertise when it comes to rental laws and management best practices as well as the amount of time you have to take care of your investment and provide a good rental experience for your tenants.
Let’s see how self-management compares to professional management.
Self-Managing Your Los Angeles Rental Home
Maybe you’re in a good position to manage your own rental home. If you have experience leasing and managing properties and you have existing relationships in place with reliable local vendors and contractors, you probably rent out a home or two on your own. Make sure you’re up to date on all the recent laws pertaining to your property and your tenants. There’s a lot you need to know about rent control, just cause eviction, security deposits, and other issues.
Here’s the true benefit to self-management: you get more control over the day-to-day operations of your rental property.
You’ll make all the decisions about how your property is maintained and what’s expected of your tenants. You’ll also have the opportunity to establish and maintain a close working relationship with your residents and you’ll gain experience in managing rental homes when you do it yourself.
This will be an advantage to the owners who want to build a portfolio of rental homes and grow within the real estate and property management industries.
However, there’s a lot of risk involved in managing your own home. Mistakes are easy to make, and they’re often expensive. Here are some examples:
- If you try to charge a pet fee for a service animal, you’ll find yourself violating multiple fair housing and anti-discrimination laws.
- A security deposit that’s returned late will land you in court.
- Setting the wrong rental price will lead to longer vacancies.
There’s often an opportunity cost as well for self-managers. You’re basically taking on a part-time, and in some cases, a full-time job. That’s not what most investors are looking for when they buy a rental property.
Benefits of Professional Los Angeles Property Management
When you work with professional Los Angeles property managers, you’re not in as much control, but you also have a lot less stress. There’s a lot less time involved, and you won’t have to worry about those expensive mistakes.
By partnering with a property management company, you’re leaving all the details in the hands of experienced professionals. Some of the additional benefits include:
- Ease of maintenance. There’s no need to rush to the property when a toilet is leaking. A good management company will have a preventative maintenance plan in place and will respond swiftly to emergency issues at the property. If you self-manage, you’ll need to be on-call 24 hours a day and seven days a week in case there’s a leak in the middle of the night or a roof collapse over a holiday weekend.
You’ll also need vendors. Property managers will often have in-house vendors who can respond to maintenance right away. Or, your property manager will contract with a preferred list of vendors who offer discounts thanks to the volume pricing they can provide. There’s also a high standard of workmanship, which provides peace of mind. If you’re a self-managing landlord, you’re at a bit of a disadvantage in finding good, affordable vendors because you don’t offer them the same volume of work as property managers.
- You’re also relieved of having to manage a tenant relationship. Not every landlord has the personality type to enforce a lease agreement or chase after late rent. Property managers provide a buffer between you and the people renting your home.
- There’s less risk and liability falling on you. Your property manager will understand the rent control laws, the eviction restrictions, security deposit laws, Section 8 vouchers as qualifying income, and all the differences between pets, service animals, and companion animals.
When you don’t want to spend your time working the leasing process, the tenant relationships, and the maintenance, professional management is best.
Los Angeles Property Management Systems and Processes
Property managers have solved just about every problem that you could encounter when renting out a home. With all of our experience and expertise, we have perfected effective and efficient systems that take care of everything from rent collection to lease enforcement to inspections and maintenance.
You’ll have access to state of the art accounting when you work with a management company. That will help you track and document all of the income and expenses associated with your rental property. Everything will be documented, including tenant correspondence, inspection reports, and property condition.
Property Management Fees and Costs
You can also expect to save money with professional property management in Los Angeles.
Many people have the idea that self-managing is cheaper for a property owner. But, you might find that self-management is actually more costly. Property managers generally fill vacancies faster, and we typically place tenants who are better qualified. Here’s another bonus: when you work with a professional property manager, you can deduct that cost from your taxes.
Many landlords also hire a property manager in the beginning so they can skip many headaches before managing on their own as well. You might need a professional to set up systems and show you how it all works before you’re ready to do it on your own.
If you’re struggling to decide whether you want to rent your home out yourself or work with a Los Angeles property manager, we would love to talk with you. Please contact us at Earnest Homes and let us know how we can help.
