For rental property owners, a significant decision must be made whether to manage your properties or collaborate with a professional Costa Mesa property management company. On the one hand, do-it-yourself property management can be reasonable for owners with repair and maintenance skills who enjoy interacting with their renters. Nevertheless, managing rental properties daily is a genuine job that can be very time-consuming. This is why for others, professional property management makes more sense. Acquiring a professional to perform all the day-to-day management frees up a lot of time, which rental property owners can use to develop leads and grow their investment portfolio.
So, how do rental property owners who hire property management companies compare to rental owners who manage their properties? To address this question, below are a couple of recent statistics about rental property management that provide significant insight into the activities of rental property owners nationwide.
Individual Investors Own 20.5 Million Rental Units
Of the approximately 50 million rental housing units in the United States, around 41% – or 20.5 million rental units – are owned by individual investor landlords. Also known as “mom and pop” landlords, individual investors make up a significant percentage of rental property owners nationwide, especially in owning single-family rental homes.
More (Multi-Family) Rental Units Are Owned by Businesses than by Individuals
At the same time, about 25.8 million rental units aren’t owned by individual investors but by some other business entity or collective. The rental units that aren’t owned by individual investors or families tend to be in multi-family properties and apartment buildings.
The Average Landlord Owns Three Properties
On average, landlords own about three rental properties. And for numerous landlords, the cumulative value of these three properties is below $400,000. Nearly 40% of landlords own properties with a combined value of less than $200,000, while 30% own properties valued between $200,000 and $400,000. Another 30% of landlords own properties with a total value above $400,000, with just 7% owning properties worth $1 million or more.
Single Property Landlords Tend to Buy as a Primary Residence
While owning three properties is the average nationwide, several landlords got their start in rental property ownership by switching a primary residence into a rental. In reality, about 50% of landlords who possess just one rental property purchased it as a primary residence before transforming it into a rental.
Half of All Landlords Manage Their Own Properties
Regarding property management, about 45% of property owners manage their own properties, according to statistics. Most of these are individual investors and own three or fewer properties.
Contrastingly, 44% of property owners transfer their property management duties to a professional. These rental property owners tend to be investors who own properties in more than one state, those who wish to increase their wealth through investing, and those who own multi-family properties.
The final 11% of landlords are individuals who manage properties owned by others, or professional landlords.
The Benefits of Hiring a Property Management Company
Based on these statistics, it’s fascinating to observe that landlords who manage their own properties tend to find their investment opportunities limited. It is not a surprise that landlords who manage their own properties tend to own a smaller number of rental properties. When done right, managing rental homes entails a substantial investment in time and resources.
Investors that intend to run their investment properties like a business – which they are – are more inclined to get a qualified professional to manage their properties for them. Most DIY landlords realize that professional management is a crucial part of their strategy to continue to invest in rental properties.
Intelligent rental property owners engage with professional property managers for several factors. In most situations, however, these factors include benefits such as saving time and being able to focus on other important aspects of the rental business. Access to additional resources, such as for marketing purposes, and better financial management and reporting are further advantages. Having the correct property manager may provide you with vital insider information into local rental markets, assist you in locating off-market bargain properties, and save money on maintenance and repairs through preferred vendor programs.
Assume you’re a rental owner who is considering acquiring a property management company. These statistics indicate that it can be a prudent choice to expand your rental business. Whether you’re looking to save time, maximize your rental income, or simply grow your rental portfolio faster, hiring a company like Real Property Management Integrity can benefit you in several ways.
So why wait? Contact us online today to learn more!
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