Should You Hire A Property Manager or Self-Manage

As the current owners, we have the legal right to manage our own rentals. However, managing properties for other investors requires establishing a separate, licensed property management company—something we don’t currently offer.

For investors, one of the most important decisions after purchasing a rental property is whether to hire a property management company or self-manage. Each approach has its own advantages and drawbacks that can affect your cash flow, tenant relationships, and overall returns.

The Case for Hiring a Property Management Company

Hiring a property management company means outsourcing the day-to-day responsibilities of owning rental real estate. This typically includes tenant placement, rent collection, maintenance coordination, and handling lease enforcement or evictions.

Pros of Hiring a Property Management Company

1. Hands-Off Experience
   A management company handles all tenant issues, maintenance requests, and rent collection—allowing you to be a truly passive investor.

2. Professional Expertise
   Experienced managers understand local rental laws, fair housing regulations, and the best marketing strategies to minimize vacancies and maximize rent.

3. Stronger Tenant Screening
   Professional managers have access to advanced screening tools that verify credit, employment, and rental history, reducing the risk of bad tenants.

4. Streamlined Maintenance and Vendor Access
   Management companies often have established relationships with reliable contractors and vendors, often at negotiated lower rates.

5. Scalability
   If your goal is to grow your portfolio, management companies make it easier to own multiple properties or operate in different markets without being spread too thin.

Cons of Hiring a Property Management Company

1. Cost
   Management fees typically range from 8% to 12% of collected rent, plus leasing fees and other add-ons such as high maintenance costs for repairs. They typically will sub out repairs and add 20% for themselves. Over time, this can eat into cash flow.

2. Less Control
   You may not agree with how repairs are handled, which tenants are approved, or how communication is managed with residents.

3. Variable Quality
   Not all property management companies are created equal. Some deliver exceptional service, while others cut corners or fail to communicate effectively. Both mom and pop and large scale PM’s have their strengths and weaknesses and you need to decide which one works best for your rental.

4. Potential for Misaligned Incentives
   A property manager’s primary goal is often stability, not maximizing profits. They might renew leases below market value. I have seen this firsthand on many occasions. They simply don’t want to put in the effort and paperwork to increase rents. You need to set a reminder 60 – 90 days prior to lease renewal to make sure they are notifying the tenants of a rent increase. Some approve questionable tenants to fill vacancies faster to claim a higher occupancy rate. Great for them but eventually this will come back to haunt you if they are late with rent or cause you high costs with a turnover.

The Case for Self-Managing Your Rental Property

Self-managing your rental property means taking on full responsibility for operations—tenant acquisition, maintenance, rent collection, and compliance with local laws.

Pros of Self-Managing

1. Higher Profit Margins
   Without management fees, you retain more of your rental income and improve your cash-on-cash returns.

2. Complete Control
   You decide how repairs are handled, how tenants are screened, and how quickly issues are resolved. If you can find a reliable handyman, HVAC and electrician, that is a huge plus.

3. Closer Tenant Relationships
   Direct communication with tenants can foster loyalty and accountability, reducing turnover and improving property care. 

4. Firsthand Market Knowledge
   Managing your own property keeps you in touch with real rental trends, market rents, and local tenant demands.

5. Skill Building
   Self-management helps you understand every aspect of being a landlord—valuable experience if you plan to scale your portfolio later.

Cons of Self-Managing

1. Time-Consuming
   Managing a rental property can feel like a part-time job—especially when you’re dealing with late-night maintenance calls, evictions, or turnovers. 

2. Legal Liability
   Landlord-tenant laws can be complex. A simple mistake in handling security deposits or notices could result in costly fines or lawsuits. A simple remedy is to keep a separate savings account for deposits only.

3. Limited Resources
   You may not have access to bulk maintenance discounts, marketing tools, or the same screening systems professional managers use. However, online property management service like Innago, Buildium or Yardi will provide these resources if you decide to set up an account.

4. Emotional Decisions
   It’s easy to make emotionally driven decisions—like being too lenient on a late-paying tenant—which can hurt your business long term. Here’s my tip: Tell the tenant that you are the property manager, NOT the owner. That allows you the opportunity to keep you impartial, charge late fees, and reject unreasonable requests (re-painting, installing fans, etc.) when you the “owner” will not agree.

5. Difficulty Scaling
   As your portfolio grows, managing everything yourself becomes increasingly difficult without delegating some responsibilities. That is why having local repair services and an online property management service available will help you scale.

Which Is Right for You?

The decision ultimately depends on your investment goals, lifestyle, and risk tolerance.

• Choose a Property Management Company if:

  • You value your time more than the management fee.

  • You invest out of state or own properties in multiple markets.

  • You prefer to be a hands-off investor focused on scaling.

• Choose Self-Management if:

  • You live near your rentals and enjoy being hands-on.

  • You’re building experience as a new investor.

  • You want to maximize profits and maintain full control.

There’s no one-size-fits-all answer. Many investors start by self-managing one or two properties to learn the ropes, then hire a management company as their portfolio grows.

Whether you go the DIY route or outsource to professionals, the key is knowing your numbers and defining your goals. The right choice is the one that helps you grow your real estate portfolio while maintaining your desired balance of time, income, and control.

And that California investor who is buying our two turnkey properties this Friday, he is self-managing them.