Everywhere you look these days, there seems to be a "for rent by owner" property. As a property owner looking to enter the rental business, you might be wondering whether to follow the same model.
The disadvantages of being a DIY landlord are well-known: it's not easy to attract good tenants, you may overlook property maintenance, and even keeping rental income records can be a challenge.
But then, why are more and more landlords opting to self-manage their properties? Is there more to this than meets the eye?
Put More Money in Your Pocket
Your goal as a landlord is to earn as much rental income as possible from your property. Setting a competitive rental price and ensuring the property has a paying tenant most of the time are some of the best ways to achieve that goal.
Another strategy is to keep property expenses as low as possible. A major expense you can do away with is property management fees. If you hire a professional manager, they'll take about 10% of the monthly rental income as their service charge.
This is money that will end up in your pocket when you take the "for rent by owner" approach. Or, you can redirect it to other uses, such as paying for property inspections.
Complete Control Over the Property
DIY landlords have complete control over their properties. This is beneficial in a few ways.
One: inspection and maintenance.
When you hire a property management company, they're in charge of these functions. What if the company isn't serious about its job? Your property could be neglected, falling apart without your knowledge.
But when you're in charge, you'll be mindful of the state of the property, conducting regular inspections and not skimping on routine maintenance. This is how you preserve property value.
Two: liability issues.
Landlords have a legal duty to provide a reasonably safe and healthy living environment for their tenants. If you don't, you can be sued and fined.
As a DIY landlord, you're in a good position to take care of your property and ensure compliance with all legal requirements at all times.
Make the Most of Landlord Tax Benefits
Landlords are allowed to make a raft of deductions from their taxes. You will still make use of this deduction when you have a full-time property manager working for you, but with DIY property management, you can stretch those deductions even further.
For example, if you're using paid landlord software, you're allowed to deduct the software's subscription fees. You wouldn't be able to do this with a property manager since they are using their tools to manage your rental.
For Rent by Owner: Is It Right for You?
It's not by chance that rent by owner-landlords is on the rise. There are real benefits that come with being a DIY landlord as the article has demonstrated.
However, it's always best to let the professionals do the job for you. Whether you need a full-service arrangement or a specific service like tenant screening, PMI Bridgetown is here for you.
Although we're part of a larger national franchise, our firm is locally owned and independently operated. Contact us to speak with an expert.