It is certainly possible for a landlord to manage their own rental property, as long as they have the time and the interest and the knowledge.
Resources are also necessary. A self-managing landlord must be prepared to understand all of the local, state, and federal laws that come with renting out a home in Modesto, Merced, or anywhere in California. Technology is increasingly important as well. Without it, a rental property owner will spend a lot of time on rent collection, accounting, leasing, inspecting, and communicating.
Managing a rental property without the expertise and support of a property manager may even provide some rewards. Landlords can maintain complete control over everything, from tenant selection to property condition to rent collection and lease enforcement. If a landlord is interested in being as hands-on as possible with their investment, this could be the right path.
That doesn’t mean there aren’t challenges. There are plenty of those, and that’s why so many successful real estate investors choose to partner with a professional management team. Not only are there complexities during the leasing, management, and maintenance of rental properties, there’s also the difference in profitability. Many rental property owners have discovered that they earn more and spend less when they’re working with full-service property managers.
Let’s take a closer look at the challenges of managing a rental property all alone. This should help landlords and rental property owners decide whether or not they are ready.
Marketing and Leasing: Finding a Qualified Tenant
Some of the early challenges will arise during the leasing process. This is where landlords must prepare the property for the rental market. It’s important to attach a rental price that’s competitive and accurate but also profitable. Marketing has to be done strategically, limiting vacancy and attracting well-qualified renters. Tenant screening is a big requirement, and landlords need a lease agreement that’s legally compliant and enforceable in California.
Not as easy as it may seem – finding a tenant. Here are some of the challenges that many self-managing landlords tend to run into:
- Pricing Challenges. How do landlords know where to set their rent? There are a number of factors that influence rental price, but all pricing decisions must start with the local market and the competition. What are similar homes renting for in the area? How does one property measure up against all the others? Look for reliable data in order to price a rental property effectively. We know that a lot of independent landlords are left to rely on information from sites like Zillow and Rentals.com. That’s a great starting point, but the analytics and insights that we collect on a daily basis are far more accurate and provide a lot more nuance. The benefit of a property management partnership is that landlords have a rental value that both reflects the market and allows them to maximize what is being earned in consistent and stable rents. With the right data, it’s easier to avoid the risk of overpricing a property and enduring a long, expensive vacancy and underpricing a property and losing money.
- Marketing and Advertising Challenges. There might also be some issues when it’s time to market a rental home. Everyone is using online listings, and this is an important way to put a rental property in front of a large pool of tenants. But, it’s essential to ensure the listing stands out in a crowded and competitive market. As tenants scroll through the properties for rent on one site after another, all of them start to look the same. It’s important to grab their attention and hold it. Landlords have to make sure their listing attracts good tenants and leads them to scheduling a showing. By managing the leasing process on their own, landlords have to put together an effective strategy. A property manager, on the other had, already has a great process in place for taking high-quality photos, writing concise but informative descriptions, and listing the property on all the sites that tenants use most. We have the technology that can syndicate a listing across multiple platforms, and we can track performance.
- Tenant Screening. How to be sure the tenant being placed will pay rent on time, take care of the property, and follow the terms of the lease agreement? Screening is one of the most important parts of renting out a property, and landlords doing it on their own might run into problems accessing the necessary information. A thorough screening process includes a national eviction check, pulling credit reports, examining rental histories, and verifying income. Establish some qualifying rental criteria and demonstrate that each applicant is being held accountable to the same requirements.
When we’re talking about the challenges of leasing a home, all of these particulars matter, but perhaps what matters even more is complying with fair housing and rental laws. California is even stricter than the federal government when it comes to protected classes and discrimination. The way a rental home is marketed can unintentionally be problematic if a landlord chooses the wrong language in the listing. The screening process can be seen as discriminatory if any applicant is approved or denied outside of the established qualifying criteria.
Property managers remain in compliance and ensure the leasing process leads to a profitable and pleasant rental experience.
Collecting Rent and Enforcing the Lease
Collecting rent on time can be a challenge for self-managing landlords. It’s important to establish a rent collection policy in the lease agreement, and to enforce it consistently. To ensure rent comes in on time, it’s important to:
- Allow for online payments.
- Be clear about grace periods and when rent is officially late.
- Implement and collect late fees.
- Be willing to communicate with tenants about late rent and expectations.
On-time rental payments are essential for consistent earnings and financial management, so having it come in late or not at all is a huge problem. Property managers will have strict and consistent policies in place for how rent is collected, when it is late, and what the consequences are if it doesn’t come in on time. We understand the eviction process, but we also know how to avoid eviction (which is almost always in an owner’s best interest).
AB 2747 requires landlords of buildings with more than 15 units to report rental payments to major credit bureaus if a tenant opts in for this service. For leases entered into on or after April 1, 2025, landlords must offer the option at the time of the lease agreement and then at least once annually going forward. For leases outstanding as of January 1, 2025, landlords must offer the service to renters no later than April 1, 2025, and then at least once annually. Landlords can charge a $10 fee or the cost of providing the service from each tenant who opts in, unless there isn’t an actual cost to the landlord.
Lease enforcement can be a challenge, too.
A lot of landlords come to us while self-managing because they’re not sure what to do when they discover an unauthorized pet at their rental property or because they suspect a tenant is subletting a rental home without approval or because tenants are making changes to the property without permission. These are not necessarily common situations, but they are things for which a landlord needs to be prepared when managing on their own.
Maintenance Challenges for Self-Managing Landlords
Maintenance is a challenge on its own.
Processes are needed for routine maintenance, emergency repairs, and preventative services. Preferred vendors have to be available if there’s a plumbing problem in the middle of the night or a pest control problem that has gotten out of hand. Landlords need to budget properly for those unforeseen expenses with a roof or an HVAC system. Owners must know when it’s time to replace a refrigerator rather than repairing it again.
A lot of the landlords we talk to find it difficult to find affordable, high-quality vendors and contractors. We work with a long list of service professionals who have been screened and with whom we have negotiated the best prices.
There are dangers to hiring unlicensed workers. We only use companies and individuals who are licensed and insured. Don’t invite extra liability into a rental property.
One of the best reasons to partner with a property manager is to leverage the maintenance resources we provide. Not only do we help you keep properties well-maintained, we also make recommendations about upgrades and updates that will make an investment property more valuable and attract better tenants. We manage inspections, we document the condition of the property, and we handle security deposit returns and protect the value and condition of an investment.
Renting out a home comes with challenges for everyone.
The process can get a little more complex when a landlord is managing on their own, however. Without the benefit of a professional’s experience, it’s easy to make mistakes and miss out on opportunities.
We can help you avoid these challenges. If you have any questions about what you’ve read or you’d like to talk more about the value of professional management, please contact us at New Bridge Management. We serve Modesto, Turlock, Merced, Stockton, and the surrounding Stanislaus, Merced, and San Joaquin Counties.
