Dear PoPville – Pros and Cons of using at rental management company?

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“Dear PoPville,

I am considering renting out my Park View area rowhome. While managing the rental myself is certainly an option I am considering, I would be interested to hear from others about the pros and cons of using a rental management company. I am particularly interested in costs of using a company and particular recommendations of specific companies.”

14 Comment

  • There’s a little bit of discussion on that topic here:
    More detailed discussion here:
    This thread was about renting out a condo, rather than a rowhouse, but probably has some relevance:
    Possibly relevant:
    (looking for recs for managing a very small condo building)
    (looking for recs for managing a more typical-size condo building)

  • They typically charge 10% of your rent in management fees plus one-time cost (sometimes one month of rent) to fill in a vacancy for the unit.

    Pros: it frees up your time if you have a busy day job or want time to focus on your family, they handle all tenant issues such as filling vacancies, handling repairs, and collection of rent and usually deposit all proceeds after fees into your bank account automatically. They are well versed in handling tenant issues and will answer the phone at midnight for an emergency repair so you don’t have to.

    Cons: No one will ever take care of your property as well as you would, you still have to manage you manager from time to time (can’t trust them blindly to do all maintenance), the 10% fee might make the difference between positive and negative cashflow after all your expenses, its hard to find a good property manager who will take care of the unit like you would.

    weigh out your time value and your expenses and see what value a property manager adds to your situation. good luck!

    • Pretty much this ^. I’m ten-years down the DIY path. There are some days when being my own manager really, truly sucks: Days off of “real work” to be a landlord. Occasional calls/texts at random hours or weekends. Jetting out of the office on no notice to take care of something urgent or meet a prospective tenant who only can meet at 2pm and didn’t bother telling you that until 1:15pm. Relying on my own wits to find reliable repairmen, and other random contractors. And of course the process of finding tenants and showing the place every year or so.

      But those days are few and far between. I’d estimate that I’ve spent 30-40 days total doing that, over the past decade. And since I have two units that rent out pretty well, if I assume 10% might have gone to a management company, that’s pre-tax savings of probably $30k-40k over time. So it’s easily been a financial gain, as I don’t make nearly that much money from my day job. I paid myself essentially $1000/day to be my own manager (slightly less, as I assume management fees are tax deductible). Plus, I’ve always been hands-on — knew my tenants, had them know me, and always knew more or less what was going on with my most significant asset. So I’m happy with my DIY choice, but boy-oh-boy are there days when it really sucks.

      if faced with this today, the 3 factors I’d consider: (1) how close will you or someone you really trust be to the property if you are going to manage it yourself? Would it be a complete pain if you had to get to the property in short order? (2) what shape is the condo in now? Is it likely to need repairs on an ongoing basis, or is everything new and well maintained? (3) how busy are you otherwise? and how comfortable are you that you generally can figure this sort of stuff out?

  • Whatever you do, do not use Chatel Real Estate! They are a nightmare to work with.

  • Frantzces

    I currently work for the DC Apartment Company and am a licensed agent.

    They handle all of the marketing.
    Deal with all of the renters.
    Setting up appointments & showings.
    Handle lease signings.
    Collecting deposits.
    Keep you updated on the process.
    Handle the application process, credit check, rental history, criminal background check.
    You won’t have to deal with the day to day handles of a rental which is time consuming, frustrating because renters cancel, withdraw, no show in some cases.

    It really depends on the rental company that you use.
    Some are not as efficient as others, so it’s important to do your due diligence.

    I hope this helps! I would check out a few, speak to a few then meet and then decide.

    Good luck!

    • I’d add that rental management companies also know the law of the land, and the line between tenants rights and your rights as the landlord. We use a management company for our loft in another city, and I simply cannot recommend enough that everyone else do the same. There’s nothing like having someone else ready to handle, say, a broken A/C unit that suddenly needs to be replaced (finding contractors, soliciting bids, getting it installed). It’s not like you can leave your tenant without A/C for two weeks while you figure that out (when I was a renter in DC, I had an individual landlord try that, and we ended up in court–where I won).

  • Everyone has gone over the pros and cons here. I have aways used a rental management company and while it sucks to lose the money, it is worth it to me, but for others, it’s not so that will just have to be your choice. While they generally start at 10%, you can negotiate that. I have been able to get it down to 8%. I have used Rock Creek Management before in DC and they are great. I’ve referred them to friends before as well and they also had a positive experience. They are a small family owned company.

  • akbrown29

    As a tenant, I can say that NEST does an amazing job and is always helpful. They do 6 month checkups on the house and immediately respond to issues we have.

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