Property Manager – Tarzana – Residential and Commercial Property Management
To Self Manage or Hire Professional Management, that is the Question
The decision to self-manage or hire professional management can be a very daunting – especially if the owner is new to owning income properties.
Not in all circumstances do we recommend hiring professional management – there are instances of when an owner is better positioned to self manage (this discussion is the topic of another post).
However, if an owner wants to leverage his/her time and maximize profitability while controlling cost, hiring a professional property management company is the way to go. This article will outline 3 instances when owners who attempt to self-manage, may actually be harming their investments.
Owners Who Self-Manage Don’t Actually Save Money
Many owners mistakenly believe that by self-managing their properties, they are saving money (and therefore making more profit as a result). Unfortunately, this way of thinking is flawed for several reasons.
Let’s take the basic premises that most owners believe property management is simply collecting rents and calling a handyman every so often to make a repair. The perception is that management companies simply sit and wait for the rent checks to come in and wait for a tenant to submit a work order. This is true unfortunately for many property management companies – they are reactive instead of proactive.
A solid property management company should be able to assist owners in identifying various ways to increase income and control costs. A professional property management company should have the experience to identify issues of concern with the property before it becomes a liability to the owner or before it becomes too costly to repair.
Owners Who Self-Manage May Fail to Appreciate “Time Value of Money”
We have a wide range of owners that have various socio-economic backgrounds. Our owners are “high net wealth individuals” but also first time investors. Some of our owners became owners by accident, i.e., they own a condominium in Woodland Hills, but are moving in with a boyfriend to save money and they want to rent out their condo. Very few of our owners, whose properties we manage, have the time and luxury to handle the day-to-day dealings with property management. Our owners have jobs to work or companies to run during the daily work hours. The value of their time exceeds what they pay for property management and the headaches, which can come from ownership. They prefer instead to own real estate and enjoy the passivity which real estate affords them. This passivity can only occur by hiring independent professional management.
Owners Who Self-Manage Can Create Liability for Themselves
Property owners who self-manage can often times create additional liability exposure to their net worth, without being aware that they are doing so. For example, one particular Los Angeles owner had been severely under insured upon us taking over management of their building. We were able to identify this and obtained the proper level of insurance. Not more than 14 months later, we had to file a large water damage insurance claim and had the owner not adjusted their coverage as we advised, their claim would not have been covered to the extent it was as a result of our insurance audit.
In conclusion, sometimes it makes sense to self manage. However, there are many instances where hiring a professional property management company could very well end up making you more money, respecting your time and limiting your liability.
FROM: http://kigcapital.com/
Carnahan Property Management Services Woodland Hills,West Hills,Bell Canyon, Hidden Hills, Calabasas, Canoga Park, Tarzana, Reseda, Topanga, Encino, Northridge, Van Nuys,North Hills,Chatsworth, Sherman Oaks, Studio City, North Hollywood, West Hollywood, San Fernando Valley, Granada Hills, Mission Hills, Simi Valley, WestLake Village, Agoura, Toluca Lake, Valley Village, Burbank. Call us at (818) 884-1500
