As a real estate investor, one major decision you’ll have to make is in regards to how you’ll actually have your properties managed. Most rental homeowners recognize that there are more valuable ways to spend their time than being a landlord themselves. But what’s the best way to outsource those management responsibilities?
If you’re struggling to choose between an on-site manager and an off-site management company, you’re not alone! Let’s break down the difference between the two approaches and sort through the pros and cons.
Off-Site Property Management vs. On-Site: The Basics
Property managers – whether they’re on-site or off-site – are tasked with largely the same responsibilities. They have to carry out basic maintenance, conduct emergency repairs, perform site inspections, handle move-ins and move-outs, and so on. Although they share the same responsibilities, where they differ is in their relationship with the property – and with you, the owner.
An on-site property manager usually lives on (or very near to) the property they’re managing. In a large apartment complex, for instance, one of the rental units might be reserved for them. The on-site manager is often the owner’s direct employee – i.e. you pay their salary and job benefits.
Off-site property management services are typically a full company rather than an individual employee. As the name suggests, these services don’t typically have staff who reside on the premises. Instead, they have an off-site local office from which they make service calls, engage residents, oversee operations, and contract professional technicians to carry out maintenance work.
Choosing between on-site and off-site management
There isn’t necessarily a one-size-fits-all approach to hiring a property manager. Either approach may be right for you, depending on your particular circumstances or number of properties owned. But for many rental property owners, working with an off-site property management firm delivers clear advantages. Here are five major factors you may not have considered:
- More growth potential
As a real estate investor, building your portfolio is one of your top priorities. When it comes to scaling, on-site management can make this challenging. After all, an on-site resident manager can only take charge of one building at a time. If you own three properties, you may have three different points of contact and the larger your portfolio grows, the more your day may consist of managing managers instead of having more time for your other high-value opportunities.
An off-site agency, on the other hand, is able to manage as many properties as you own. That means you can oversee operations for your entire business with just one point of contact. This makes the logistical side of growing your real estate portfolio a lot more seamless.
- Better rates
Any property is going to need maintenance or repairs at some point in time, whether it be large repairs or minor upkeep fixes – e.g. plumbing, roofing, electrical work. An on-site manager does exactly what you would do: They contact an appropriate contractor and pay standard retail prices for their parts and labor.
An off-site management company may have the means of providing a more efficient approach. Because they work with professionals at a much larger scale, these services can pre-negotiate below-market rates. Great Jones, for example, has a large network of pre-vetted, trusted and insured professionals who provide top-quality work at below-market price. We’re able to provide repairs and service at wholesale pricing.
- Higher service quality
Because they work with a large number of professionals, off-site property management companies can also rotate through their network to find the best technicians. A company like Great Jones invites each tenant to rate their experience after a maintenance call. The service professionals who are rated highest for their speed, skills, and professionalism are used most frequently so that the overall quality of service stays top-tier.
This kind of sophistication just isn’t possible for an on-site property manager who’s either performing handyman duties themselves or hiring vendors intermittently from a smaller pool.
- Simpler rent collection
When it comes to rent collection, an on-site manager can work as your proxy. Although it’s certainly valuable to have someone else doing that kind of legwork – i.e. knocking on doors, depositing checks, and issuing late fees, a modern property management company provides a
streamlined rent collection method. With tenant-friendly features like simple online payments that take away additional physical and manual processes, your cash flow consistently arrives on time and your renters stay happy.
- Smarter tenant screening
Screening tenants and filling vacancies is one of the most time-consuming and high-stakes efforts for any property owner. Your income depends on your ability to place residents as quickly as possible, but you can’t afford to be careless in your choices. If a tenant breaks the lease or damages your property, it can actually end up costing you more money.
On-site managers generally can’t help you with this process, beyond meeting prospective renters and showing the empty unit. But with a large off-site agency, tenant screening is a different story. They’ll check for criminal history, prior landlord disputes, and uses a historical database of renters to make smart, predictive decisions for a perfect tenant for your rental property. This makes the entire process faster and simpler, while providing you the highest quality tenants.
The Bottom Line
Ultimately, every property owner needs to make a decision based on their unique circumstances. However, for most owners, off-site management services offer a slew of advantages that maximize your revenue and simplify your daily life.
So, if you’re ready to sit back, collect rent checks, and focus on growing your portfolio or taking an extra vacation, get in touch with Great Jones! You won’t ever feel like you’re managing your manager, while you have the access and transparency to know exactly what’s going on with your properties and how they’re being managed.