Texas was the number one state people moved to in 2023, meaning we have a huge influx of newcomers looking for rentals right now. Combined with comparatively lax rental laws, this is a great time for investors to build their Texas real estate portfolios.
Once you've secured a great rental property, it's time to decide on your rental strategy. Will you list your property as for rent by owner or partner with a professional property management company?
We want to help you make an informed decision. Read on to learn the pros and cons of renting to tenants under FRBO.
Pro: Closer Tenant Relationships
If you got into the rental business because you enjoy working directly with people, you may enjoy operating a private owner rental. When you're the constant go-to for tenants, you're more likely to form a real relationship with them. If you have a property manager, you may never interact with tenants at all.
Keep in mind that being close with tenants doesn't guarantee having a good relationship with them. The way you handle things like tenant screening and maintenance will make a big difference.
Con: 24/7 Rental Responsibility
Rental units aren't self-sufficient once you find a tenant. While tenants bear some responsibility when it comes to upkeep, most responsibilities fall on you as the landlord. That includes midnight and weekend emergencies.
One of the biggest reasons we end up providing landlord rescue services is a landlord's inability to keep up with their property. If you aren't taking charge of rent collection or maintenance, your property will fall into disarray.
Pro: Total Control Over Your Management Strategy
Experienced landlords may like how they approach their rental strategy. They may feel confident that they can meet tenants' top desires and manage their funds in a successful and lucrative way.
When you hire full property management services, you will forgo some of that control. However, many property managers will customize your services to split responsibilities with you so you can do what you love and outsource what you don't.
Con: Potential Profit Loss
Are you prepared to track your rental property metrics and see if you're maximizing profits? Are you performing rental valuations often to make sure you're getting the most out of your rent? Are you adopting a maintenance strategy that reduces maintenance costs?
If the answer to any of these questions is no, going it alone could lead to profit losses. Many people assume that FRBO means a lower overhead and higher profits. However, professional property managers can often increase profits thanks to real estate savvy and rental expertise.
For Rent by Owner vs. Property Management: Which Will You Choose?
If you're thinking of renting on a for rent by owner basis, you'll need to learn everything you can about the rental process. If you don't want to make your rental property your full-time job, it's time to hire property management.
Under our broker Kathy Scott, Blue Ribbon Property Management has become a staple of the College Station rental landscape. The Blue Ribbon difference is our commitment to real-time communication with both our tenants and our investors. Contact us today to learn more.
