Managing an Investment Property: Self-Managing vs. Hiring a Property Manager
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With home prices nearly 50% higher than in 2020, according to a report from Harvard’s Joint Center for Housing Studies, consumers continue to flock to the rental market–along with savvy investors and entrepreneurs. While long-term rental properties provide vast opportunities, managing an investment property requires additional time and resources.
Many first-time rental investors don’t know how to manage rental properties and wonder whether it’s better to self-manage or hire a rental property management company. Luckily, Finance of America Commercial (FACo) is here to help simplify your decision! In this article, we’ll discuss the pros and cons of self-managing an investment property vs. hiring a property manager and which approach is best for you.
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While learning how to manage your own rental property comes with growing pains, there are several benefits to learning how to become a successful landlord. Let’s look at the biggest pros and cons of self-managing rental properties:
The biggest reason investors self-manage rental properties is the cost-saving benefits. By managing an investment property, investors can avoid a property management team’s monthly fees–typically between 7-10% of the tenant’s monthly rent–and any additional costs for marketing, leasing renewals, and other miscellaneous fees.
By self-managing an investment property, you gain complete control over decision-making, including:
The time and energy it takes to play landlord is perhaps the most significant deterrent for investors. Landlords must be jacks-of-all-trades and available 24/7 to handle various property and tenant concerns, including:
When you do the research and find a credible rental property management team with a proven track record, you get the experience, knowledge, and systems needed to succeed. An experienced property management organization brings a defined, uniform, and proven process for the entire property management lifecycle, including:
Costs
The decision to self-manage a rental property or not depends on your personal situation and business goals. While both self-management and property management teams have their pros and cons, the choice ultimately boils down to three things:
Regardless of how you choose to manage an investment property, adequate and accessible capital is essential to rental investment success. Whether you’re looking for a Single Rental Loan or Rental Portfolio Loan, FACo has you covered with some of the most comprehensive and flexible long-term rental loan programs in the country.
Our residential rental loans include:
Choosing between self-managing a rental property and hiring a property manager depends on your available time, experience, budget, and investment goals. Self-management allows landlords to save on management fees and maintain direct control over operations. Hiring a professional property management company can reduce daily responsibilities, streamline tenant communication, and make managing multiple rental properties easier.
Rental property management companies commonly charge between 7% and 10% of monthly rental income, although fees vary by location, property type, and services provided. Additional expenses may include tenant placement, lease renewals, maintenance coordination, and property inspections. Real estate investors should compare management contracts and calculate how these costs affect their rental property's overall cash flow and profitability.
A rental property manager typically handles tenant screening, rent collection, lease administration, property maintenance, marketing, and tenant communications. Property managers may also coordinate repairs, manage vacancies, and assist with compliance with applicable landlord-tenant regulations. These services help real estate investors reduce administrative responsibilities while maintaining efficient rental property operations.
Self-managing an investment property allows landlords to avoid professional management fees, maintain direct relationships with tenants, and control important financial and operational decisions. Investors can personally oversee maintenance, select service providers, and monitor property performance. However, successful self-management requires time, organization, and a thorough understanding of local rental laws and landlord responsibilities.
The biggest challenges of self-managing rental properties include handling maintenance emergencies, collecting overdue rent, resolving tenant disputes, managing vacancies, and complying with landlord-tenant laws. These responsibilities can become increasingly time-consuming as an investor's rental portfolio grows. Without adequate planning, self-management may lead to operational delays, unexpected expenses, and increased legal or financial risks.
Real estate investors should consider hiring a property management company when managing multiple rental units, investing in properties far from their primary residence, or struggling to balance landlord responsibilities with other commitments. Professional management may also benefit investors unfamiliar with local rental regulations. The decision should account for management fees, expected rental income, and the value of the investor's time.
Hiring a property manager may improve rental property return on investment (ROI) by reducing vacancy periods, improving tenant retention, and coordinating maintenance efficiently. However, management fees and additional service costs can also reduce net rental income. Investors should compare potential operational improvements against management expenses to determine whether professional property management supports their financial goals.
Real estate investors can access financing options for both self-managed and professionally managed rental properties. Debt Service Coverage Ratio (DSCR) loans evaluate qualifying rental income relative to debt obligations, while rental portfolio loans can help finance multiple investment properties. Finance of America Commercial (FACo) offers Single Rental and Rental Portfolio loan programs designed to support eligible investors pursuing long-term rental property ownership.
This content is for informational purposes only and should not be construed as investment or legal advice. Neither the author of this content nor Roc360 assumes any liability for actions taken or not taken based on information contained herein. Investments involve risk, including potential loss of principal. You should consult a qualified professional before making financial decisions.
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