In the past, I wrote about who should self-manage and who should hire a property manager. You can read it here. Many people only think about these 2 options when it comes to managing properties.
However, what a lot of people don’t know is that there is a 3rd way to manage your properties. It stands between self-management and hiring a property management company. That is the 3rd way, which is a hybrid management approach.
Let’s say you do not want to manage properties yourself, so you decided to hire a property management company. But there is a problem with it, and many people miss it. That is that you probably have to give up control regarding how to manage properties. The fact of the matter is most, if not all, the property management companies will NOT manage exactly the way you want. The reason is it’ll be very inefficient to manage different ways for different owners. Imagine if a property management company has multiple late fee structures, different property management agreements, different lease agreements, etc. Even the most efficient property management company won’t be able to handle that.
This is like going to a car dealer and buying a car. You have to pick what’s available, and your option is limited in terms of customization. If you want a car that is a few inches longer than what's available because that’s how you want it, well, you are out of luck.
So what’s the hybrid model? That is to hire someone to manage your properties exactly the way you want the properties to be managed. This way, you are not managing yourself, but you are not giving up control regarding how the properties will be managed. With the above example, instead of starting a car company yourself, you hire someone to customize a car. You are not involved with the actual work, but you get what you want.
Obviously, this is not for everyone. It probably won’t make sense if you only have one rental property. But if you have 50 properties, instead of hiring a property management company, it might make sense to hire someone properly licensed if necessary and start your own management business.