Why shouldn’t I manage the property myself?
The landlord business has drastically changed in recent years. Within these FAQs, we have described our screening process. Because of new credit reporting laws, property owners do not have access to these resources and if they did, the cost would be prohibitive. Real Property Management screens thousands of tenants a year and because of that volume, we pay reasonable fees. Additionally, new credit reporting laws put huge responsibilities and penalties on all landlords regarding the safe keeping of renter’s personal information. Identity theft is a huge problem and because landlord applications include all of the information needed to steal one’s identity, they are required to follow certain rules to secure it. If a tenant of yours has his or her identity stolen — and you cannot prove that you followed the rules in safeguarding that information — you could be held liable for the damages to the tenant, which could be thousands upon thousands of dollars.
Risk. Certainly, the credit information above puts the landlord at risk, but there are many more. There is HUD, which enforces the Fair Housing laws. But there are also Fair Housing Advocates who receive Federal funds to test landlords to ensure that they are following Fair Housing laws. I honestly believe that most landlords out there don’t purposely discriminate, but because they are not aware of the laws, they often get nailed for violating fair housing regulations. There are dozens of common mistakes made by landlords unaware of Fair Housing Laws, but a common one is denying an applicant who has a dog, or maybe a cat, because you do not accept pets for your property. If the renter’s dog or cat is a support or companion animal, you cannot just flat out deny them. Additionally, you cannot charge any additional fees or collect extra deposits. Local Fair Housing Advocates often sue for maximum general district court damages of $25,000-$50,000 per complaint. Is it worth the risk to self-manage?
There are plenty of other risks involved. The fact is that Real Property Management is a professional company. We have been doing this since 1985 and undergo hundreds of hours of education each year to stay on top of it. That much training is far too costly for an individual homeowner to endure.
Lastly, many owners simply look at the monthly management fees and look at a way to remove that expense. This is short sighted. In the long run, professional management should add to your bottom line, not deduct from it, not to mention a professional managers cost is tax deductible.