As a new landlord, you are excited by the prospect of managing your investment property on your own and think that you can manage your tenants by yourself, without any external help. However, as time passes, you start to realize that managing your rental is a demanding task.
You have a ton of responsibility and no respite, especially if you have a full-time job. Most new investment rental owners do not factor in the actual costs of property management and end up under- or over-compensating.
So, what are the real costs of DIY management in Columbus? What are the factors that come into play? Should you be a DIY landlord?
There are two types of property management costs - direct and hidden.
Direct Costs of DIY Property Management
Maintenance and Repairs
As the landlord, you are responsible for the maintenance of the rental. This includes fixing appliances like microwaves, dishwashers, geysers, and the HVAC unit. Things like broken glass, damaged flooring, furniture, faucets also come under repair work.
While managing these by yourself, you will have to be finding and contacting tradesmen and technicians for repair work, like a plumber for clogged lines or a carpenter to repair the flooring. If you are a resourceful person, finding a good technician shouldn’t be that hard but if you have no experience then you will have to struggle to build a network. In addition, you need to have some knowledge yourself too. If you are unfamiliar with the issues, technicians may end up overcharging you, increasing your maintenance costs.
Plus, there is the added problem of coordinating your, the technician’s and the tenant’s timings. Imagine doing this with multiple people at different times; it can get exhausting very quickly.
Disposition of the Security Deposit
As a landlord, it is favorable to find a suitable tenant who signs a long-term lease. At the end of the lease, if the renter decides to move out instead of renewing it, you will have to inspect the property and confirm that everything is in proper condition. If few things have to be fixed/changed, you will have to find a contractor who will provide you the estimates of the expense. Only after this, you cut that amount from the safety deposit and return the remaining amount to the tenant.
Failure to return the safety deposit on time can cause legal issues. If the matter escalates to the court, you may end up paying up to three times the safety deposit unnecessarily. Hence you need to be cautious and prompt while winding up the process.
Hidden Costs of DIY Property Management
As the landlord, you are responsible for being available for your renters all around the year and pretty much round-the-clock. Problems appear out of nowhere and are completely unpredictable. Being available for your tenants means that your time may be occasionally compromised. If a tenant calls you when you are out for the weekend with your family or on a trip, you are obliged to attend their call and address their problem.
Lost Rent Due to Vacancy
The average tenancy duration in the United States is approximately 36 months; it is a mere 16 months for the city of Columbus. This statistic tells us that tenants in Columbus tend to switch homes a lot. This is concerning from a landlord’s perspective because that directly translates to finding a new tenant almost every single year. If you don’t find one soon, you may end up bearing the cost of rent lost due to vacancy.
Managing your investment rental on your own isn’t as easy as people say, rather, it can get very taxing. An alternative to this would be hiring a property manager that is well informed about the process.
Solutions for Real Estate can be your trusted real estate and property management partner. In business since 2001, S4RE has been a leading independent brokerage in central Ohio for residential, commercial and property management. Connect with us to discuss your real estate needs.