Owing a rental property is a smart way to earn passive income, but “passive” is a relative term. There can be a large variation in how hands-on (or off) the job is, especially when you go it alone and self-manage the rental property.
And, as we all know, the hands-on part doesn’t always occur during the 9-5 work day.
A few years ago we began collecting data on every single after-hours emergency call we received during an entire year in Columbus, Ohio. Results from our data highlight some interesting trends, which you can read about here. On the whole, our analysis suggests that you can and should expect a middle-of-the-night call from approximately 1 in 4 tenants per year in Columbus.
That means if you own a duplex unit, at least every other year, you’re going to hear from a tenant with a 3 a.m. emergency. As you scale up and grow to 8 units, you can expect a call at least twice a year on average, and so on as you continue to expand your portfolio.
Balancing the demands of self-managing with the value of your time
A middle-of-the-night emergency can be more than just a wake-up call to deal with a tenant’s situation. It can also prompt you to consider whether you want to continue self-managing your units or if you should hire a property management company to take over these responsibilities.
As you consider your goals, interest and ability in keeping up with the day-to-day responsibilities, here are some important questions to ask yourself:
How many units do you currently have, and what are your long-term goals?
A lot of real estate investors have the very real intention of adding to their portfolio over time. While initially it may be feasible to self-manage the properties, after a certain point in time it will no longer be sustainable to manage the growing number of units you have in your portfolio by yourself. There’s simply not going to be enough time in the day.
What’s more – professional management has the tendency to grow a property’s NOI more quickly than self-management. So if you want to scale up your real estate portfolio with a BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat), hiring a professional property management company can help accelerate your timeline.
What is your time worth?
A lot of people who come to us to inquire about property management are ambitious career professionals. They are active in their workplace or are entrepreneurs with their own businesses to run.
For career-driven property owners, a question to ask yourself is whether it’s a better use of your time to be answering phone calls from tenants and showing properties, or if it makes more sense to pay a property manager a flat monthly fee so you can remain focused on your own career ambitions and those activities that provide the highest value for you.
As you consider your own situation and comfort level handling the myriad of responsibilities that come with property ownership, feel free to reach out to us at RL Property Management Group with questions.
