For rental property owners, a key decision must be made whether to manage your properties or hire a professional Glenview property management company. On the one hand, do-it-yourself property management may make sense for owners with repair and maintenance skills who enjoy interacting with their renters. However, managing rental properties daily is a real job that can be very time-consuming. This is why for others, professional property management makes more sense. Appointing a professional to take over on all the day-to-day management frees up a lot of time, which rental property owners can use to improve leads and develop their investment portfolio.
So, how do rental property owners who hire property management companies compare to rental owners who manage their properties? To answer this question, here are a few recent statistics about rental property management that provide valuable insight into the practices 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 most landlords, the combined value of these three properties is below $400,000. About 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
Although owning three properties is the average nationwide, many landlords got their start in rental property ownership by converting a primary residence into a rental. In fact, about 50% of landlords who own just one rental property bought it as a primary residence and then later transitioned it to a rental.
Half of All Landlords Manage Their Own Properties
Looking more specifically at property management, statistics show that about 45% of property owners manage their own properties. Most of these are individual investors and own three or fewer properties.
In contrast, 44% of property owners outsource their property management tasks to a professional. These rental property owners tend to be investors who own properties in more than one state, those looking to grow their wealth through investing, and those who own multi-family properties.
The remaining 11% of landlords are individuals who manage properties owned by others, or professional landlords.
The Benefits of Hiring a Property Management Company
When looking at these statistics, it’s interesting to note that landlords who manage their own properties tend to find their investment opportunities limited. It’s no coincidence that landlords who manage their own properties tend to own a smaller number of rental properties. When done well, managing rental homes requires a significant investment in time and resources.
Investors looking to run their investment properties like a business – which they are – are more likely to hire a qualified professional to manage their properties for them. Most DIY landlords find that professional management is an essential part of their strategy to continue to invest in rental properties.
Savvy rental property owners hire professional property managers for many reasons. But in most cases, these reasons include benefits such as saving time and being able to focus on other important aspects of the rental business. Other benefits include having access to more resources, such as for marketing purposes, and better financial management and reporting. Hiring the right property manager can give you critical insider information into local rental markets, help you find off-market bargain properties, and save money on maintenance and repairs through preferred vendor programs.
Suppose you’re a rental owner considering hiring a property management company. These statistics show that it can be a smart decision that will enable you to grow 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 Chicago Group can benefit you in many ways.
So why wait? Contact us online today to learn more!
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