Property management Vs. DIY landlording

Our advice on using a professional property management company versus doing it yourself comes from our role as both property managers and actual investors. We have our own portfolios of investment properties, so we have a number of tips and things we’ve learned along the way that you will find useful if you’re trying to decide whether to manage your own properties or hire a professional.

DIY property owners often don’t understand the legalities and laws involved in rental properties. You have to know the federal fair housing laws that protect people from discrimination. Here in Houston we also have to pay attention to the regulations overseen by the Texas Real Estate Commission. You need to understand the Texas Property Code as well as the local eviction codes. These things can get investors into trouble when they don’t know or understand the laws.

One of the biggest problems we often see with DIY investors is that they don’t treat the property like a business. They often use their hunches to make decisions and they don’t have set procedures and policies written down to protect themselves and their properties. A lot of times, they don’t follow their own rules, and that results in expensive problems. It’s very important to have a set of procedures in place for every possible situation, and then you have to follow those procedures. It’s the best way to keep yourself legally compliant. What you do for one tenant or applicant is what you have to do for everyone. That’s the point of those fair housing laws. Even if you think you’re being fair, you may not be in the eyes of the law.

Investors who are DIY property managers are usually lacking leverage. They can’t leverage their time or the team mentality of having other people help them. For example, they could be working with real estate agents to find them great deals on properties, they could hire construction crews to get work done quickly and they can have an easier time getting rent collected on time. All these things can be leveraged inexpensively with a property manager. You have to have the right team on your side.

When you can leverage your time and your resources, you have more opportunities to do whatever it is you love doing. That might mean spending time with family, working on your own career or finding more real estate deals. You are the investor, but that doesn’t mean you have to do everything yourself. Leverage your time and you will be more successful.