For many real estate owners, managing a rental property themselves can seem like a smart way to maximize profits and stay closely involved in their investment. After all, who knows your property better than you?
While the idea of saving on management fees and maintaining direct control is appealing, the reality of DIY property management is quite different. Not everything is so straightforward, not even rent collection. And, there are a number of hidden costs that can either be a total shock or quietly chip away at your returns and peace of mind.
From legal missteps and prolonged vacancies to emergency calls at 2 a.m. and time-consuming tenant issues, the challenges of self-management can quickly become overwhelming for Las Vegas rental property owners. Even more concerning, many of these pitfalls don’t become apparent until they’ve already impacted your bottom line.
As Las Vegas property managers, we are always stepping in to help owners who are feeling a little bit over their heads or distressed at what they’re spending on maintenance or losing on vacancy and tenant turnover. Let’s uncover the less obvious—but very real—costs associated with managing your property yourself. We’ll also explain how understanding these risks can help you make more informed decisions about the best way to protect and grow your investment.
Las Vegas Tenant Management
Tenants will take up a lot of time when you’re a DIY manager, and if you’re not careful about which tenants you place in your property, they can cost you a lot of money.
As property managers, we invest in tenant quality. Finding the right tenant instead of any tenant is important. A pleasant and profitable rental experience requires a good tenant, and DIY owners do not necessarily have the screening capability that professional property managers do. Can you access the national database for evictions? Do you know what you’re reading in a credit report, or are you just checking the credit score?
Let’s talk about some of the hidden costs that come with a bad tenant:
- Potential for late rent payments or rent not coming in at all.
- Eviction.
- Lease violations.
- Conflict and disputes during the tenancy and even after the tenancy.
- Property damage exceeding the security deposit.
- Continual conflicts and disputes.
You don’t want to lose money by placing an unqualified renter, and DIY landlords are more at risk for accepting a tenant who is going to be risky and expensive. Las Vegas property management partnerships save money by ensuring that only high-quality residents are approved to live in your property. We have extensive screening tools that look at everything we need to know about the tenant we’re placing in your property. As professionals, we screen tenants on a daily basis; we know what the red flags look like and we know what a qualified application looks like. Don’t put your property or your profitability at risk by signing a lease with a tenant who has not been thoroughly screened or who “seems” to be a good fit based on your gut or your instincts. You’ll lose money.
Screening tenants is only the first part of managing your tenant relationships. You’ll also have to think about tenant retention because if you have constant turnover, you’re going to lose money. Property managers work hard to prioritize tenant experiences, leading to higher tenant satisfaction and better earnings.
Self-management can lead to more tenant turnover and higher costs. Unless you have the time, talents, and systems to focus on tenant retention, it’s possible you’ll lose your tenant at the end of every lease term. That means more money spent on the turnover process, more money lost on the vacancy, and extra time required to market your property to new residents. There will be maintenance costs and aesthetic updates. You’ll have to call in the cleaners and take new marketing photos. You’ll have to list your property for rent again.
Property managers in Las Vegas can keep vacancy and turnover to a minimum, saving you money in the short-term and the long-term.
DIY Management and Higher Maintenance Costs
Who are your vendors? Are you making repairs on your own?
That might seem cost-effective, but what are you really spending?
A lot of DIY owners struggle to find the maintenance services that they need, especially when there are emergencies that require a sense of urgency. If you don’t already have a relationship with a plumber and your tenant calls in the middle of a holiday weekend to report a leak, you may be in a tough spot.
Self-managing landlords are also more likely to overpay for maintenance services. As Las Vegas property managers, we have the benefit of getting the most attractive pricing from the vendors and service providers we work with. That’s because we’re able to provide them with a significant volume of consistent work. Individual property owners cannot keep up with that, and therefore their pricing is a bit higher.
Working with a professional property manager, you’ll leverage these maintenance relationships and save money. You’ll also have a solid maintenance plan in place that protects the value and condition of your property. Something DIY landlords need to understand is that with professional management, there’s less deferred maintenance to worry about. We’re on top of it. There are fewer expensive emergencies, too. That’s thanks to our constant attention and preventative services.
Finally, property managers partner with tenants to ensure that maintenance requests are made in a timely manner, so there’s no threat of unreported issues.
We can provide an easy-to-use online portal where tenants can make maintenance requests electronically, at any time. They can provide detailed descriptions and even photos. This gives us an accurate record of work that was needed and an indication of how it was completed. It keeps the entire maintenance process efficient and cost-effective.
DIY managers spend more on maintenance than owners who partner with a professional management company. This is one of the best ways to leverage the relationship and to benefit from cost savings. You’ll also have a property that’s in better condition and more attractive to current and future residents.
Avoiding Expensive Legal Mistakes and Liability
One of the hidden costs that a lot of DIY managers don’t think about until it’s too late is the expense of legal claims, lawsuits, and regulatory mistakes.
It’s so easy to make a legal mistake. You might not even realize you’re making it until it’s too late.
For example, do you know how to lawfully evict a tenant? You cannot just show up and demand they leave. You cannot change the locks or turn off the water. There’s a process that includes a notice period, a court summons, and a valid judgment that ultimately delivers the property back into your possession. Trying to evict on your own can lead to a lot of legal trouble.
There are also strict rules and requirements around things like:
- Fair housing. Landlords need to know the protected classes. You might be at risk because you’re using language in your marketing materials or your listing that can be perceived as discriminatory. You might not have a consistent screening process in place with documented rental criteria, which can get you into trouble. There’s a difference between a service animal and a support animal, and neither of those animals can be treated as pets. Fair housing violations can cost an owner more than $10,000. This is not a mistake you want to make, and for a lot of DIY property owners – simply understanding what the laws are and how they are changing can be a challenge.
- Security deposits. Nevada has some strict security deposit laws. Security deposits are limited to the equivalent of three months’ rent for unfurnished dwellings. Landlords can’t require tenants to pay both a security deposit and the last month’s rent upfront. Within 30 days of a tenant moving out, landlords must return the security deposit along with an itemized list of any deductions. If you make a mistake or forget a deadline, your tenants can take you to court. That’s expensive.
- Rents. There’s no rent control in Nevada, but there are strict timeframes on how much notice you are required to provide your tenants before you raise the rent.
Las Vegas rental properties need a strong lease to protect you as the owner. A common mistake DIY landlords tend to make is that they’ll download any lease template that they find on the internet. This is not a great idea, because you have no idea who wrote that lease or where it came from. To effectively and lawfully rent out a property here, you will need a lease agreement that is both legally compliant with Nevada laws and legally enforceable in Las Vegas courts. A property manager can provide that, saving you from expensive mistakes and legal pitfalls.
These are just some of the most expensive mistakes that a DIY landlord can make. There are so many other ways you are likely losing money. Is your rental value right? Are you making upgrades and improvements?
Let’s talk about some of the ways that we can help you spend less and earn more. Please contact us at New West Property Management. Our team expertly manages residential rental homes in Las Vegas and throughout Clark County, including Henderson and North Las Vegas.
