As a landlord in Indianapolis, you’ve probably found yourself at a crossroads when it comes to managing your rental properties. Should you handle everything in-house or trust a professional management company to take the reins? It’s a question that touches every part of your business, from profitability and time management to tenant satisfaction and long-term growth.
The right choice depends on your goals, resources, and how hands-on you want to be in your day-to-day operations. Both in-house and outsourced management come with distinct advantages and challenges, and understanding those differences can help you make a decision that supports your bottom line and peace of mind.
Let’s take a closer look at what each approach offers and how to determine which one fits your investment strategy best.
Key Takeaways
- Choosing between in-house and outsourced property management depends on your time, resources, and investment goals.
- In-house management gives you direct control, stronger tenant relationships, and hands-on experience, but it also requires significant time and effort.
- Outsourcing to a property management company can save time, reduce legal risks, and increase operational efficiency through expert systems and industry knowledge.
- Professional property managers often provide full-service solutions, including marketing, tenant screening, maintenance coordination, rent collection, and accounting.
- Costs vary, but outsourcing can often lead to long-term savings by minimizing vacancies, legal issues, and property damage.
In-House Property Management
With in-house property management, either you or your employees directly manage your rental property. That means you'll have to handle every single responsibility, or delegate them to your employees. These are the advantages to consider when self-managing properties:
Reducing Costs
Property management companies tend to charge you about 8-12% of your rent, along with leasing fees. These are costs that you can typically allocate for other things, like property upgrades that appeal to tenants (smart appliances, modern security systems, cosmetic changes).
Fostering Direct Tenant Relations
When the landlord works closely with their tenants, it can lead to stronger trust. That means you will have better tenant retention, and they will be incentivized to be good tenants to maintain their tenancy.
More Control Over Operations
When you manage your own property, it's easier to control operational costs, renovations, minor upgrades, and tenant disputes. In many cases, property owners prefer a more hands-on approach to their rental business.
Learning the Ropes
As you handle day-to-day operations, you get to gain valuable landlord experience. You can use your acquired knowledge to expand your investment property portfolio in the future, since the core functions will already be familiar to you.
Assembling Your Own Team
Property managers tend to come from property management companies that already have their own team, but with in-house property management, you can find, screen, interview, and hire your own staff, providing you with more comfort.
Outsourcing Property Management
About 51% of property owners hire property managers, which suggests it's a common decision among real estate investors. It can be the key to rental business growth, allowing you to expand your portfolio.
Enhanced Efficiency
Property managers have extensive experience in the rental and real estate industries, so the core operations of a rental are second nature to them. Your business will benefit from streamlined operations enabled by on-time rent collection, coordinated repairs, prompt responses to maintenance requests, and overall increased efficiency.
Fewer Legal Risks
Part of risk management is understanding and navigating rental laws, and property managers provide access to legal expertise. Their knowledge extends beyond basic local, state, and federal laws, such as Fair Housing laws, ensuring legal compliance and avoiding costly lawsuits.
Compliance Monitoring
Renters don't always follow the rules outlined in the lease agreement, and property managers understand what needs to be done to correct the errors. They collect rent when the tenant fails to pay on time, charge for tenant-caused property damage, and enforce other lease terms you set. As a proactive measure, property managers conduct meticulous tenant screening so you'll only get responsible tenants.
Time Saving
Managing a rental property is a full-time job, especially if you also have a few properties under your care. Outsourcing property management frees you from time-consuming tasks, giving you more valuable time. A property management business will have the proper resources to handle the workload with ease. Most will have a 24/7 line as well, which is critical for emergency maintenance needs.
Financial Management
A property management company will handle your financial records, such as rent payments, variable and fixed expenses, and profits. With accurate, organized numbers, you will make a more informed decision about what to do next, whether you want to invest in another property or improve your current rental.
What Does a Property Management Service Include?
There are many options to consider, given that some property management services are more comprehensive than others. You can even opt for tailored outsourcing solutions, wherein only certain aspects of property management will be delegated to a property manager. Typically, a management company offers services like:
- Marketing: They can increase your rental listing's visibility both in person and online, using market analysis and professional tools.
- Tenant Screening: Property managers can check credit scores, employment verification, debt-to-income ratios, eviction history, criminal history, and previous landlord references of potential tenants.
- Rent Collection: Rent will be collected through your preferred payment methods, as well as an in-house tenant portal where you and your tenants can view transaction histories. Notices will also be issued for late rent payments.
- Maintenance: Routine repairs and regular maintenance will either be fulfilled by an in-house staff or by working with a network of reliable vendors.
- Accounting: The property manager will create accurate and detailed account statements and reports, so you can make data-driven decisions for the future of your rental property.
- Evictions: The proper eviction process will be followed to ensure legal compliance, and the company will immediately find a new tenant to reduce vacancy.
In-House or Outsourced Property Management FAQs
Why do landlords hire property managers?
- Property owners hire professionals to get the most value out of their property, spend time on more personal matters, and/or gain access to internal resources that a company can provide. It may vary depending on a landlord's needs, but all benefit one way or another.
What does outsourcing property management mean?
- It simply means you hire professionals to handle your daily operations. Some landlords inquire about back-office services for easily outsourced tasks like leasing services and administrative tasks, while others choose to get a full-service property management.
How much would it cost to hire a third-party property manager?
- Several factors go into pricing, such as the fee structure and what you require from them. Some may base the cost on the number of tenants you have, since they will serve as the main point of contact for anything your tenants need.
Here’s a closer look at our pricing packages.
Does in-house property management have lower costs?
- Not necessarily, since you will have to account for things like employee training, office space, and other overhead costs.
Before You Make a Decision
The thought of having less control over your property can be unsettling at first, but let us put your mind at ease. At CRM Properties, you will have access to a global talent pool for the best service quality.
We will streamline your day-to-day operations, as well as ensure that your tenants are taken care of. Your business goals will be our business goals.
Learn more about outsourced property management. Contact us!