Should you self-manage your rental? An honest accounting

Plenty of people should self-manage. If you own one unit, you live nearby, you are handy, you have time on weekday afternoons, and you have a tenant who has been there four years, hiring a manager is likely to cost you more than it returns. We say so to owners who ask, and it costs us the account.

What follows is the comparison as we would make it for ourselves, including the parts that do not favour us.

What self-managing genuinely saves

The management fee, obviously, and the leasing fee. On a single unit in this region that is a real sum every year, and for an owner whose alternative use of the time is not particularly valuable, that money is straightforwardly won.

What it actually costs

• Availability, not hours. The total time is modest; the problem is that it is unpredictable and it is not yours to schedule. A heating failure does not wait for a convenient evening.
• Vacancy, which is where self-managing owners most often lose more than the fee. A unit priced by feel rather than by comparable leased rents, or marketed a month late, costs weeks of rent — and weeks of rent exceeds a year of management fees.
• Vendor access. A manager sends a plumber regular work; an individual owner is a one-off call, which shows up in both response time and price, most acutely in January.
• Compliance exposure. Deposit handling, required disclosures, municipal registration and the state sanitary code are all obligations regardless of who administers them, and the penalties do not scale down for a single-unit owner acting in good faith.
• The relationship. Being the person who screens, sets the rent, chases late payment and declines the renewal is uncomfortable when you are also the neighbour upstairs.

Where the arithmetic tips

A useful test: how many weeks of vacancy would it take to exceed a year of management fees? On most Greater Boston units the answer is a few. Then ask honestly whether managing it yourself makes those weeks more or less likely — through pricing, through marketing timing, through how fast you can turn a unit, and through how confidently you would decline a marginal applicant.

The other tipping points are structural rather than financial. Distance, once you no longer live close enough to be there within the hour. Unit count, where two or three properties stop being a hobby. And the September calendar, which punishes an owner who cannot devote a specific fortnight to turnover.

The middle option people forget

Tenant placement only. A manager prices, markets, shows, screens and executes the lease; you take it from there. It puts professional work at the two moments with the most money attached — pricing and tenant selection — and leaves the ongoing administration with you.

For a confident owner with one nearby unit, that is frequently the right answer, and it is a legitimate way to buy the part of the service that is hardest to do well yourself.