This is one of those decisions that doesn’t feel big until you’re in it.  

Recently, I asked my dad, who is local and retired, if he wanted to manage my rentals.  I told him I would pay him 8% or rents which is roughly the going rate.  His answer was a resounding "no".  But, then he asked me if I would manage my rentals for the same amount of money and it made me think.  I don't think the answer to that question is a resounding "Yes" for me!  So that begs the question, if I'm not willing to be paid to be the manager, why am I not willing to pay somebody else?

I own six units. I can still self-manage them. Nothing is “out of control.” But that’s exactly why this is such a difficult question. It's not because things are breaking but because my attention is divided.  I often find myself not addressing issues immediately that end up costing me money in the long run.

Early on, self-managing made sense. I needed stabilize the units and do some significant renovations. I also think it's important to learn the business: tenant relations, maintenance schedules, real costs versus pro formas. The late-night texts and small issues were part of that education.

One further complication for me personally as a broker is that I benefit from the real estate professional tax designation. This isn't an issue most investors have but there are still a lot of other considerations:

When self-managing still makes sense

• You’re early and learning the business

• You want full visibility into operations

• The portfolio is small and geographically tight

At this stage, self-management builds knowledge and provides greater control.

When it starts working against you

• You’re dealing with the same issues over and over

• Tenant needs interrupt higher-value work

• You delay decisions because you’re stretched thin

The cost here isn’t just time. It’s mental bandwidth and can sometimes lead to lower returns.

Where management starts to earn its keep

• You value consistency over control

• Your income scales better outside day-to-day operations

• You want fewer decisions that take up your bandwidth

Yes, management costs money. But unmanaged distraction can cost more.

If you are on the fence, this does not have to be an all or nothing decision. Partial management, temporary management, or even a trial period can tell you quickly whether the trade-off is worth it.

At some point, the goal shifts from being involved in everything to building something that doesn’t require constant attention. The challenge is recognizing when you’ve crossed that line before burnout or missed opportunities make the call for you.

-Nick Laverriere