Consideration #1: The budget
As with most things, when you hire someone else to do a job, it will usually cost more than doing it yourself. However, if your investment property has good cash flow and profitability, your budget may have plenty of room to outsource the management tasks. Another way to look at this is by considering how much your time is worth. If your time is limited and you are spending a lot of it self-managing an investment property, you may be losing out on greater potential income opportunities elsewhere.
The Bottom Line: If you have extra time to spare, and are trying to keep expenses low, then self-management might be a viable option.
Consideration #2: The people
Self-managing your real estate investment property will require you to deal with people. From interviewing tenants and negotiating maintenance contracts to dealing with complaints and disputes, much of the job is about relationship building and people skills. If this is something that you enjoy and excel at, then self-management will give you the chance to be up close and personal. Networking with contractors, getting to know local realtors, and having a face to go with a tenant name are all things that can add value.
The Bottom Line: If dealing with people isn’t your cup of tea, you might want to leave the management duties to someone else.
Consideration #3: The decisions
Some people love hand-selecting their paint colours and designing their own marketing materials. They want to pick and choose what projects and repairs they do themselves and which ones they hire out. When you self-manage your Toronto investment property, you essentially control the direction of every decision. On the other hand, if making decisions on a regular basis is stressful, or you don’t feel that you have the necessary required experience, a property management company can help make things a little easier.
The Bottom Line: If you like being very involved with every decision, and have the confidence to go along with it, then self-management could be a great fit.
Consideration #4: The location
A final consideration to keep in mind when deciding whether to self-manage is your distance from the investment property. If you live and work full time in Toronto, and are usually only a quick drive away, then self-management is doable. However, in today’s world, many people spend much of their time travelling for work or pleasure and relocate their “home base” often. While many property management tasks can be done remotely, there will almost always be some face time required at the property.
The Bottom Line: If your lifestyle and career don’t allow you to stay near your investment property, hiring a property manager who will be close by might be preferable.
Experience can often be one of the best teachers, so if you are looking to learn more about managing investment property, doing it for a few years might be a perfect solution. It can save you money, help you network, and allow you to be actively involved in big and small decisions alike. Alternatively, if your time is limited, you travel a lot, or you don’t enjoy the work required to self-manage, then your best bet may be to outsource property management duties.
At CleveDoesMore, the best part of our job is helping people make informed choices to minimize their risk while building equity and wealth for their future.