Real estate investment is one of the most popular ways for modern Americans to diversify their income. Atlanta is no outlier to this; property investment is booming in our bustling Georgia capital. If you’re investing in real estate, you also have the responsibility of managing the property.
One of the most common debates amongst property investors is how property management should be handled. 51% of rental property owners work with a property manager. The choice couldn’t be much tighter than that. You might be asking yourself, should I conduct my property management in-house or hire a third party manager?
Much of the time, the deciding factor is going to come down to the needs of you and your property. Understanding the differences between in-house and third party, their drawbacks, and what each can offer you is where you start.
That’s why we’ve put together this blog on the differences between in-house and third party property management to help you make the best decision for your investment property.
In-House Property Management
In-house property management involves the property owner running all the operations for the rental property themselves. You can hire your own team to perform specific tasks, but you are the ultimate head of the property and all management falls on your shoulders. This style is often done by owners who have 1-4 smaller rental properties.
- This style of management will give you the most control over how your rental property is managed. Since you will have direct oversight of the property daily, you will get full control over every decision made.
- Since you are playing the role of owner and manager, you’ll be able to tailor management strategies to suit your property and tenants’ unique needs. Rather than management coming from someone who manages multiple properties, the property will get your own personalized touch.
- Hiring a property manager for your rental will come with costs in the form of property management fees. Choosing to manage the property in-house will avoid those fees.
Disadvantages:
- If you decide to manage a property yourself, that comes with the cost of time and labor on your behalf. If you have multiple properties or a larger property with multiple tenants, that can quickly become almost a full time job to make sure everything is managed correctly.
- Depending on your property’s needs, you might have to hire your own team to help run aspects of management. This means that you don’t only have to manage the property and keep the tenants happy, you also have to act as manager of a staff.
- There are many moving pieces in property management. From marketing to tenant relations to legal regulations, there are very few who are going to have expertise in all of these fields. It can be stressful to keep up with all of it on your own.
Third Party Property Management
Third party property management involves a property owner hiring a property management company to oversee all managerial duties with their rentals. This allows the owner to reap the benefits of their investment without having to turn it into a job. It’s important to hire a property management company who is trusted and experienced, as well as knowledgeable about your area of business.
Advantages:
- An experienced third party company is going to bring a team of experienced property management professionals. You won’t have to worry about any aspects of property management that you lack knowledge on. They will also provide things like a tenant portal to make dealing with tenants easier.
- No matter who is managing your rental, it’s necessary to work with outside contractors for things like maintenance and renovations. A property management company will already have a vetted network of contractors, vendors, and legal professionals to address anything the property needs.
- The goal for many investors is to grow their portfolio over time, and their wealth right along with it. This can be a headache trying to grow your management along with it when on your own. Going with third party property management will allow you to scale your operations easily as your portfolio grows.
Disadvantages:
- When you choose a third party, you are hiring a company to conduct property management for you. This hire comes with having to pay the property manager, which can cut into profits. However, it is important to weigh the costs versus the time and money that the property manager can save you.
- You potentially won’t have as much control over the day-to-day operations of your rental. Some property owners would consider this a good thing. This takes all the minutia and stress off of their plate. However, it’s still important to note that management will be overseen by the company even if they are willing to work with you on management decisions.
- The quality of service will vary depending on the quality of the property manager. That’s why it’s important for you as an owner to do your due diligence on vetting. Have consultations and meetings with property management companies and do your research before hiring.
Making the Decision
Before making this decision, you have to weigh the pros and cons of both styles of property management. As an Atlanta property owner, can you afford the time investment that managing a property on your own will take? Atlanta is a big city with many prospective tenants. But keeping up with vacancies and local regulations alone can be overwhelming.
Ultimately, it will come down to how much of a workload your property is and if you’re willing to sacrifice some profit to have peace of mind. In-house can be manageable if you only have a small property or two, but what if you plan on growing your investment? For many owners, it can be worth the cost to increase their ROI through partnering with a third party property manager.
Atlanta Property Management and You
Are you thinking that partnering with a property management company might be right for your investment? PMI Georgia is the right choice for Atlanta. We have two decades of experience in managing properties in the area. We also bring the resources of PMI that independent companies won’t have at their fingertips.
Learn more about our team and what we can do for your Atlanta rental property.
