There are many people out there who think that managing their own investment property is a good idea. 

They think that they can save money by not having to pay a professional property manager. But the truth is, managing your own investment property is a bad idea. Here are five reasons why:

1. You’re not a professional.
2. You don’t have the time.
3. You don’t have the knowledge.
4. You could end up costing yourself more money.
5. It’s just not worth the stress.
6. You could end up failing financially.
7. It could damage your reputation as a professional property manager.

1. You’re not a professional

Managing your own investment property isn’t like managing your own business. For one thing, when you manage your own business, you get to set the rules. You make whatever decisions you want to make. But when it comes to property investment, you don’t have that luxury. There are so many regulations regarding the maintenance and operation of a property that unless you’re well-versed in them, you’re going to be at a serious disadvantage. 

2. You don’t  have the time  to manage it yourself

If you think you’ll have enough time to manage your property yourself, then you need to think again. It takes a lot of time to effectively manage a property. You need to constantly monitor tenants, request maintenance quotes, deal with contractors, and much more. If you try to manage your investment property alone, you’re going to end up costing yourself a lot of money.

3. You don’t have the knowledge to manage it yourself

It takes years and years of training and experience to effectively run a property. You might have a bit of knowledge about managing a house but there’s a big difference  between managing a house and managing a property. 

For example, when you’re selling a house, you can use real estate agents to help you sell it but you can’t hire an agent to manage your property. So when it comes to things like rent collection, tenant screening, fair rental pricing, marketing your property, and compliance with the relevant laws, you’re on your own. And if you don’t have the knowledge to do these things well, then you’ll end up in trouble.

4. You could end up costing yourself money

When you manage your investment property poorly, there’s a very good chance that  you’ll end up spending money instead of making it. One of the most common mistakes people make is not collecting enough in rent.

This is a common mistake because people base their rental prices on what they’d pay to rent out the property themselves. But when you’re selling a service (your property) to a consumer, you need to give a little bit more than you get it for if you want to get customers back for more. You shouldn’t run your property like a business would.

5. It’s stressfull and can ruin your personal reputation

Maybe you work a full-time job that you don’t want to give up because of your  investment property. Or maybe you’re thinking of moving to the area where your property is located and want to get involved in the community. Either way, managing your property yourself can negatively impact your personal life if you do it wrong.

People are always watching, and if the neighbors start hearing you complaining about how much your family is affecting your property management or how much your children are around the property, they’re going to start thinking bad things about you. The same goes for your co-workers if you have to make trips to the property often for management purposes.

6. You could end up failing financially

This is a common misconception about investing in real estate: that people can simply buy a property and make money from it. That isn’t always the case. In fact, very few investors make money on their first foray into real estate.

If you fail to manage your property well and end up losing money, you’re not going  to want to continue investing in real estate. And that’s going to leave a bad impression about the investment market for you. Worse, you may end up thinking that real estate is a way to lose money. When in reality, you just picked the wrong property and/or didn’t know how to properly manage it.

7. It could damage your reputation as a professional property manager

If you choose to let someone else take the reins on your property management, chances are that person is going to want to take it seriously. After all, they’ll also be making money if the property is well-managed and profitable. This is where you could run into problems if someone who previously knew you was taking over their management. If they see any mismanagement or signs of laziness, they’re going to get worried and possibly even angry.

This could potentially cause them to run your property poorly and even set yourself back financially — all because you initially  hurt your reputation by mismanaging the property.

How to avoid the mistakes first-time real estate investors make

If you’re convinced investing in real estate is the right move for you, make sure you hire a professional company to take care of your property management. That way, you can be sure that your property is in good hands — and that you’re making smart business decisions that won’t hurt your reputation or wallet.

You should also consider consulting a professional real estate advisor who has experience managing large portfolios of properties. This could help you avoid many of the common mistakes first-time investors make when managing their own properties — and could even help you find higher-returning opportunities.

Finally, if you suspect that you might not have the time or expertise to manage the property yourself, don’t hesitate to ask others what they think of your plans. They may be more than happy to tell you that they think you shouldn’t be managing the property yourself.

Serving Both Small and Large Real Estate Investors in South Florida

Tri County Property Management offers a wide range of services for large as well as small real estate investors. Some of our services include collecting rent, finding and vetting new tenants, handling leases, repairs and the steps to get your property ready to rent. These services are offered on a one time basis, or monthly.