*Guest Blog from Lynn Carvery, Owner of HomeKey Rentals & Property Management
So… you’re considering becoming an investment property owner, great decision! However, have you thought about the day to day managing of the property and tenant relations? What is really involved? The 3 a.m. phone call that there is no heat or the call on the 2nd of the month that rent is going to be late… no kidding - it already is!
Some people are up for it, but some are not, so it’s important for you to understand what is really involved and ask yourself, “Do I self-manage my property, or do I hire a professional property management company?”. There is no right or wrong answer, there is only what’s right for you. It’s also important to realize your answer to the question may change over time or as your circumstances change.
For my husband and I, we self-managed when we purchased our first rental property 18 years ago. It was an owner-occupy situation and our friends thought we were crazy. We sold our 2200 square foot house on an acre lot and moved into a small bungalow with a 1-bedroom basement apartment. We lived on the main floor with our 1.5 & 3-year-old daughters and it was tight quarters. All we knew about being a landlord was what we remembered from being a past tenant … so we really weren’t fully prepared at all.
We learned very quickly some key lessons – being a private landlord is still a business, your tenants are not your friends and never should be considered as such. Absolutely be friendly, but try your best to keep things on a professional level. Our #1 rule when it comes to tenants: Always go with your gut instinct!
It was from this experience that I have worked professionally as a Residential Property Manager for over 12 years. I worked as a Property Manager for a small local company for 6 years until branching out on my own 6 years ago. So I’ve seen it, I’ve heard it, and I’ve cleaned up after it. Because of this, I feel confident providing food for thought when deciding to self-manage or look at hiring a professional. As with anything, there are pros and cons to both. Consider the following:
It’s Time Consuming!
Are you able and prepared to be available 24 hours a day, 7 days a week, 365 days a year? It’s true, things will happen at the most inconvenient times. I recall taking my daughter to New York City after she graduated high school – we were just about to take our seats to see Mamma Mia on Broadway and my phone starts ringing – a busted hot water tank was flooding the tenant’s basement. Fortunately, from there I was able to dispatch help to contain the situation, luckily with minimal damage, but I did miss the beginning of the play. Or one Christmas Day, when dinner was cold after having to go to a property to fix a leaking roof. But that’s all in a day's work as a Property Manager.
Consider as well that you will spend a great deal of time handling tenant issues, and it can often feel like you never stop working. If you self-manage, you may spend a lot of your ‘free’ time devoted to managing your rental. Not only do you spend time handling repairs and tenant complaints, but you will also spend time dealing with advertising, cleaning, interviews, managing money, handling tenant turnover, inspections, and more. It really comes down to determining if you have the time and funds to deal with not only the day to day requirements but also the ongoing preventative maintenance and potential emergency situations.
Jack-of-all-Trades
As a self-managing landlord, you will have to wear several hats. You will be expected to know how to maintain the property, to create compelling ads to attract tenants, to effectively screen applicants, manage different personalities, handle the eviction process, manage the books, and more. And in doing so, you need to constantly be mindful of the Nova Scotia Tenancy Act (if your rental is located in NS!), Human Rights Act, and PIPEDA. There are so many different roles to master that it can start to feel like you are drowning, but it’s crucial for your success to really understand and set up procedures to deal with the various duties of property management.
Be prepared to clean toilets more than a just a few times, grout a tub, clean gutters and chase rent - but it’s not all negative. In amongst the craziness, one day you’ll receive a text that reminds you that you are providing a valuable service to others... and that’s a safe place to call home. That day came when one of my tenants sent me a picture of their new baby announcing they had a new tenant to add to their lease – that really brought things into perspective and put a huge smile of my face and I have to admit, a little tear to my eye.. she was absolutely adorable!
So, if I haven’t totally scared you away from having a rental property, and you are saying “Sign Me Up” – that’s great news! But if you are left thinking “What am I doing?” – don’t let my words discourage you from investment properties – there is a solution – hire a professional property management company.
A Property Manager’s role is to help landlords maximize the return on their investment property while eliminating the stressors associated with being a landlord. They can be hired to do a number of things: sometimes a property management company just handles the leasing for a client where we do all the marketing, showings, processing of applications and lease creation and leave you to self-manage after that; or, hire them to do both the leasing and property management. Yes, it will cost you more, but in the grand scheme of things, with their experience, existing infrastructure, and knowledge of tenancy regulations, it could save you money and will certainly save you time (and perhaps your sanity!), in the long run.
Whether you want to be an investor who also assumes the role of landlord, or if you just want to focus on acquiring more properties, it is certainly worth a conversation with a Property Manager - at the very least - to see if outsourcing this part of your investment is for you.
- Lynn Carvery, Owner, HomeKey Rentals & Property Management