In my experience as a property owner and investor, if you have the time, resources and expertise, managing your properties yourself can be an effective way to achieve your desired financial goals when building your investment property portfolio.
Why? Because it gives you absolute control over the whole process. Here are some of the benefits of managing your own property portfolio:
You save money on fees: Let’s say you have a portfolio of properties worth $1 million dollars. If you outsource this to an agency, they will usually be charging somewhere between 2-5% of the total value on a monthly basis in order to manage your investment for you. That could equate to anywhere between $20,000 & $50,000 per year. By managing property yourself, this fee is eliminated and instead is replaced with a combination of direct cashflow and increased value from the property which can be reinvested into other properties or simply taken as profit. As you can see, this is a huge amount of passive income.
You have complete control over the quality of tenants: If you are managing property yourself, you are in charge of screening tenants and can turn down anyone who doesn’t meet your required standards. Not only does this result in no headache for you but it also means more money in your pocket since you don’t have to pay the agency for letting a bad tenant into your investment. This saves both time & energy when finding new tenants because there’s no need to do a background check and submit an application. You can do all these things yourself in a matter of hours, rather than having to give it to someone else and wait for them to do it. This means you are more effective at finding & attracting the best tenants, which leads directly to higher cash flow.
You have complete control over the repairs & maintenance: When managing a property yourself, you can make sure that everything is done your way and that no corners are being cut when it comes to repairs & maintenance. You don’t need an agency tying you down with liability issues because you know the law inside out and can make sure that anything done on the property is strictly legal. By having complete control over the maintenance process, you can save money by not hiring an agent or company to do it for you. This is a huge advantage since most property managers will charge you a percentage of each repair & maintenance bill and in turn take a substantial profit when handling your property. By managing your own portfolio, there is no need for this.
You save money on marketing: When managing property yourself, you don’t have to pay a marketing fee to get new tenants. You can also save money by not hiring a property management company to get new tenants for you. Every time a tenant moves out, you have to pay an agency to do the marketing and find a suitable tenant. This can cost anywhere between $500 & $1,000 just to get one new tenant in your investment property. If you are managing your own portfolio of properties, you don’t need to do this because there is no charge for marketing and finding tenants.
You save money on management problems: When managing property yourself, you don’t have any problems with tenants. If a tenant needs repairs done, there is no need for an agent or company to handle it since it can easily be done by you directly. If a tenant moves out early for whatever reason, there is no need to find another tenant because you will know exactly what needs to be done and will do it yourself in a fraction of the time it would take an agent or company. You also don’t have this problem when things happen during your own personal time such as holidays or weekends. All of these points are handled by you, the owner, and there is no need for an agency to step in and let you know what’s going on.
You have complete control over the property: As a landlord, you will be in charge of everything that happens on your property and can therefore make decisions on how to manage it. If you are dealing with an agency, all of these problems get dealt with by them so they might not act in your best interests. By managing property yourself, there is no worry about agency issues since everything is in your hands & under your control. You won’t have to go through the headaches of dealing with agents & companies, which means you can focus on other important things in your life.
If you have the time, resources and expertise, managing your own properties can be a highly rewarding experience and can get you closer to achieving your financial goals.
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