Is it better to hire a property manager or do it myself in Fort Collins? This is a question that all Fort Collins rental property owners are faced with.
Whether you’ve acquired a property specifically to generate passive income or you already have a home and, under the circumstances, would like to rent it out, both scenarios require someone to manage that property.
That can either be you or someone you hire to do it for you.
But which option is better?
The truth is, the answer solely depends on your situation.
In this article, we’ll provide a list of six questions to ask yourself in order to decide what’s right for you.
#1: Do you live within driving distance?
A better way to phrase this question is: if there’s an emergency, are you able to get there right away?
If not you, then a trusted contact who can go in your place?
When things go wrong and you’re the landlord, the responsibility falls on your shoulders to resolve the issue. Being a plane-ride away versus a short drive matters in these urgent scenarios.
So, if you live out of state, for this reason alone hiring a local Fort Collins property manager is a no-brainer.
However, some other considerations are:
Is there someone who can regularly perform drive-by inspections and check on the condition of the property? How about checking if the renter is subletting or renting out parts of the home as an AirBnB? (Yes, this can happen).
Do you have someone local who is able to coordinate maintenance and oversee the repairs?
In the case of legal trouble, are you prepared to drop everything and stay within the state for a potentially extended period of time until it’s resolved?
A nearby property manager who treats your property as if it’s their own will be right there in case anything happens, and also take preventative measures to protect your investment.
So, while the choice is up to you, in our option, if you live out of state then it’s better to hire a property manager in Fort Collins.
#2: Do you have the time available?
Now that we’ve covered distance, the next thing is the most valuable currency: time.
Every step of the rental process takes time. Especially if you want to do things right.
And the rental process doesn’t end once you list your property and score the perfect tenant. In fact, that’s when the real work is just beginning.
So, do you have the time to see it through?
Do you have the time to be there in the event of an emergency? How about to check up on the property? Perform inspections? Handle all of the finances? Schedule repairs?
Even before that, how about performing tenant screenings? Host showings for potential residents? Draft up a lease? Underwrite?
When it comes to property management, it’s a full-time job. That’s why there are dedicated property managers who are willing to take on the work for you, if needed.
And the thing about rental properties is that when the proper time isn’t dedicated into each of those crucial steps, that’s when things go off the rails: a fraudulent applicant who makes it through screening, a small leak that is overlooked and turns into structural damage, or a tenant who feels overlooked suddenly wants to move out.
Depending on your situation in life, you may have the time and even look forward to replacing your 9-5 with property management. But if you’re already working full-time or have other time commitments, then you may end up stretching yourself too thin.
#3: Are you confident in your tenant screening process?
One of the most critical steps in the rental process is screening tenants. In order to keep your neighborhood safe, mitigate the risk of eviction, and protect yourself from scammers.
There are “professional residents” out there who purposefully look for inexperienced landlords or owners who only have one property on the market, because they believe you’ll be an easy target to take advantage of. They have no plans to pay rent, and they’ll just string you along.
In order to protect yourself from these types of scammers, and to protect yourself from a potential eviction process, it’s vital to have a thorough screening process in place.
You need to look into things such as:
Prior rental history (Did they pay rent on time? Were there damages to that property?)
However, there are times when applicants will fake documents, or give a false number for their boss or previous landlord.
They’ll try and hide things such as a bad credit history or criminal record in order to pass.
As a D.I.Y. property manager, there are resources at your disposal that you can use in this process, but the liability still falls back on you and there’s still hands-on work involved.
So, the question to ask yourself here is: do you feel comfortable setting screening criteria, filtering through applicants, and screening them yourself? Do you have the time to do it? Will you be in a rush and overlook red flags because you want to place a tenant ASAP?
As with each of these questions, the answer comes down to your preference and availability. Some landlords like to be hands-on with the tenant they choose, while others would like the assurance of an experienced property manager to handle it for them.
#4: Do you want the responsibility of being a full-time property manager?
This is fully dependent on your situation and preference.
You may be looking to replace your full-time job with rental income, becoming a DIY property manager. If that’s you, go for it!
But maybe you’re living away from Fort Collins for a short while and want a renter to take care of your home until you return. Or maybe you acquired this property and just want to earn some passive income – maybe that’s an active part of your investment strategy.
In these situations where you want passive income on the side, it’s not always so simple. It may be considered passive income, but there’s still work involved.
At the outset, you have:
Then, after the tenant is placed, you have items such as:
Maintenance coordination and oversight
24/7 availability in case of an emergency
Evictions, if needed
And, if a tenant decides not to renew or is evicted, the process starts all over again.
As a landlord, these responsibilities fall on you. Say there’s a plumbing emergency that needs to be addressed right away. It’s on you to find and hire a contractor, coordinate the repair date with both the repairman and the tenant, then oversee the process. It’s also on you to keep your tenant up to date and maintain a positive experience for them.
One way a knowledgeable PM can help is with resources. At Evernest, for example, we have our own in-house maintenance team that can handle repairs. If it happens to be something outside of their wheelhouse, our office has a network of contractors to reach out to.
We also have systems in place for accounting, rent collections, tenant coordination, and more, to help ease the process.
#5: Are you able to have difficult conversations?
There’s more to property management than appears. Those are just the facts surrounding the property – it doesn’t even begin to touch on the human-relationship aspect of being a landlord.
Like any relationship, there are bound to be tough conversations at some point. However, because of the nature of this industry, the landlord-tenant dynamic can be incredibly challenging for some.
For example, what do you do if a tenant refuses to pay rent? What if it’s because they lost their jobs and have a family to take care of?
How will you handle it if, after you’ve formed a good relationship with your tenant, they meet rough times and are on the verge of eviction, but you need to stand your ground?
Even with contractors – will you be able to call them out if a service is done incorrectly or if they overcharge you?
While you can leave some room for flexibility, at the end of the day, owning a rental property is a business.
If you’re prepared for these scenarios, then handling your own property management can be the way to go.
However, not everyone has the personality to withstand these types of scenarios. Additionally, forming relationships with tenants can actually make the process even more difficult, because you may become attached or feel responsible for them.
In this case, hiring a property manager is the best option. A skilled PM is able to tend to your property objectively, and treat tenants and contactors with respect while still acting in your best interest.
#6: Are you familiar with rental property laws in Fort Collins?
The final question is one that oftentimes slips through the cracks, but is vital when it comes to rental properties.
There’s a lot of legality involved when it comes to rental properties in Fort Collins, particularly tenant rights. Ignorance of these laws can get landlords into hot water, which is why due diligence research is a must.
For example, did you know there is an occupancy law in Fort Collins? This specifies how many individuals can inhabit one rental dwelling and what their relationships must be to one another.
Additionally, laws are ever-evolving, with new amendments and additions popping up all the time. For example, starting in 2024, rental registration will be required. This is a specific process that includes mandatory inspections and a list of criteria that must be met.
As the revisions of this proposal are ongoing in 2023, there could still be changes made. However most registration programs include penalties for landlords that fail to meet them.
If you’re prepared to take the time, research, and become familiar with these laws, then a DIY approach may be for you.
However, if that feels overwhelming, or if you’d like to have a trusted partner whose job is to be aware of Fort Collins rules and regulations, then hiring a property manager is the way to go.
There are many variables to consider when deciding if it’s better to hire a property manager or do it yourself.
It mostly depends on your goals, the time you have available, and whether or not you even want to be a property manager.
There is no right or wrong choice — only what’s best for your unique situation.
If that’s DIY property management, then we have plenty of resources for you.
However, if you’d like to talk to a team of experienced property managers who understand the area, will treat your property as if it’s their own, and ultimately have your back, then our Fort Collins team would love to hear from you. Click here to check us out.