Should You Self-Manage Your Commercial Property?
When you first look at how much money you can save every year by NOT hiring a management company, it may seem like the right choice to manage a property yourself.
However, let's look at other factors that you should consider before kicking the management company to the curb.
USE OF TIME
You can spend anywhere from 10-20 hours a week managing your investment properties, especially if you have a multi-family.
As an investor, you need to analyze where your time is being spent. If saving yourself the money of a management fee keeps you from devoting time to finding solid investment deals, then you should determine whether it is really worth it.
There are multiple skills that are required when managing properties.
#1: PROBLEM SOLVING
Properties and tenants can be unpredictable. There is no written manual that outline each and every scenario. You will have to come up with crafty solutions that leave your tenants satisfied and don't dig deep into your pockets.
Coming up with solutions to problems that your tenants may have is time-sensitive and requires your attention.
If you have other responsibilities and cannot keep up with the demand of solving these issues, a management company is going to be a smarter choice.
#2: DEALING WITH TENANTS
If you have multiple different tenants occupying your units, you will need to have some level of customer service.
In order for your tenants to continue paying in a timely manner and to keep your vacancy rates low, you need to be able to work with the tenants, and this requires patience.
Everybody has different needs and different ways of expressing them. You must be a good listener and work with the tenant to avoid back and forth and needless confusion.
This is easier said than done. Smoothing out issues with tenants may require more time than you expect.
#3: RUNNING THE NUMBERS
Every property has a set of financials that must be prepared. You must be able to budget for additional expenses, keep your recurring expenses documented, and determine whether your current rent rates are providing you with enough rental income to break even and gain a profit.
The financial management surrounding properties can be a time-consuming task that you might just want to delegate to a management company.
CONCLUSION
You might just be leaning towards hiring a management company, or you might be convinced that you can do it all by yourself.
In either case, you must make sure that your time is being accounted for and that you are not losing out on money and other investment opportunities in an effort to save money on delegating tasks.
