Rental property owners who work with an Austin property management company may consider bringing their own tenant to the table. While managing tenants solo may seem beneficial, there are potential pitfalls to this arrangement in real estate investing.
While having a tenant in place can reduce initial vacancy, it could potentially lead to higher costs in the long run, both financially and logistically. If you’re thinking of managing tenants solo in SFR real estate investing, here are some things that you need to know.
Understanding the Potential Downfalls
In any business venture, comprehending potential risks is vital for informed decision-making, especially in SFR real estate investing. A significant concern with property owners bringing their own tenants is whether the tenant underwent proper vetting. This includes extensive background and credit checks, crucial for identifying potential red flags before signing a lease.
The advantage of tenant vetting is a major benefit that an experienced Austin property management company can offer. If you choose to manage tenants solo, you may forgo this essential safeguard. Additionally, consider the tenant’s allegiance to you as the property owner, as it could lead to conflicts with the property management company or difficulties in enforcing rules and policies when necessary.
Finally, bringing your own tenant may pose issues if rent payments are missed. Personal relationships with tenants can make it tough to enforce financial responsibilities if needed.
Understanding the Extra Work Involved
Managing tenants on your own entails taking on more responsibilities than necessary. If a tenant contacts you instead of the Austin property management company, you’ll need to invest additional time and effort.
This shift changes your SFR real estate investing from a passive to an active endeavor requiring you to assume more duties related to managing tenants solo. Furthermore, it diminishes the power and expertise that the property management company brings, potentially making it less efficient and effective in tenant relations.
Understanding Potential Legal Issues
Property management companies excel in ensuring legal compliance in real estate investing, particularly landlord-tenant laws, which can be complex and ever-changing. Staying updated on these laws can be challenging.
But, if you aren’t in compliance, you could find yourself in an expensive lawsuit that could drain you of income or, worse yet, sink your SFR real estate investing endeavor completely.
When you bring your own tenant to the table, a major question is whether the tenant was properly informed of all the details of the lease. What’s more, was a proper and legal lease even signed in the first place?
A well-written lease that abides to all relevant laws serves as the landlord’s primary protection against potential tenant headaches.
Let 1836 Property Management Handle Tenant Relations for You
While rental property owners may think that it’s beneficial to bring their own tenants to the table, there are often more negatives than positives to the situation. In fact, in the long run, bringing your own tenant could end up haunting you in the long run.
Property owners in the Austin region have been trusting the experts at 1836 Property Management to handle all aspects of their real estate investing endeavor for years, and our track record speaks for itself. Our experienced team can offer the expertise and knowledge that we’ve built over years of experience.
To learn more about how we can enhance your SFR real estate investing experience and bring you added value, contact us today.