The real cost of self managing a property is time. The number of days that your property is off the market and vacant can add up when you’re doing your own repairs or spending too much time looking for tenants. You can’t recover the rental income that’s lost in that time. You also spend a lot of your own personal time as a self manager, and you may feel like you have nothing to show for it.
The average amount of time a person stays in the property investment business is two or three years. They usually get out after that short period of time because they aren’t making any money. These short term property investors did not calculate the costs at the beginning. In addition to the costs of renting and managing your own property, you have to add in the cost of your time. After two years, if you’re working 10 hours a week and you aren’t being compensated for it, the effort is going to get old.
It’s easy to calculate the return on investment you get on your money. However, it’s hard to take into consideration the return you get on the time you invest. You want to get paid. This is a job. It’s a business. You need to think of yourself as an employee in your business, and you want to get paid for your work and your time. So, the real cost of managing your own property is your time. When you calculate the maintenance costs, the lost rental income and the amount of time you’re spending, you’ll soon realize that managing your own property is a lot more expensive than hiring a professional Grand Rapids property manager.
Another area that costs individual owners is tenant damage. Most owners will not charge their tenants for little things that really add up. For example, a broken blind might cost $5, and owners won’t charge for that when a tenant moves out. However, if there are five blinds that need to be replaced, that cost is $25, and then you might also charge $20 for your time. It’s a common mistake of self management – not collecting on tenant damages.
Finally, the emotional strain can also be a major cost for landlords managing their own property. When someone loses a dog or a job or gets a divorce, it’s easy to feel sorry for that tenant. You might hesitate to evict when rent isn’t being paid. Emotional involvement is not something you can afford, and that’s another area where a professional manager can be a valuable investment.