Should you self-manage or hire a property manager? It's one of the biggest decisions landlords face. The math seems simple - property managers charge 8-10% of rent. But the real calculation includes your time value, stress levels, and opportunity cost. This guide breaks down the true costs of both approaches.
The Real Cost of Self-Management
Most new landlords self-manage to save money. They think "Why pay 10% when I can do it myself?" But self-management isn't free - you're trading money for time.
Time required per property per month: Rent collection and communication: 2-3 hours, maintenance coordination: 2-4 hours (more if issues arise), tenant turnover: 20-30 hours per turnover, inspections: 2-4 hours annually, bookkeeping: 2 hours, emergency calls: unpredictable (midnight AC failures). Total: approximately 10-15 hours monthly, plus 20-30 hours per turnover.
What's your time worth? If you earn $50/hour at your day job, you're "paying yourself" $500-750/month to self-manage. On a property renting for $2,000/month, a property manager costs $160-200/month. You're working for $500 to save $200 - not a great trade.
Property Manager Costs Breakdown
Standard fees: Monthly management: 8-10% of gross rent, leasing fee: 50-100% of first month's rent (one-time per new tenant), maintenance markup: 10-20% on contractor work, lease renewal fee: $100-300 (some managers), early termination: varies if you fire them mid-contract. Example on $2,000/month rent: Monthly: $160-200, leasing (every 2-3 years): $1,000-2,000, annual cost: approximately $2,000-2,500 plus leasing fees.
Hidden Costs of Self-Management
- Vacancy costs from amateur marketing: Professional managers fill vacancies 30-50% faster. Extra month of vacancy = lost rent of $2,000+
- Poor tenant screening: One bad tenant costs $5,000-10,000 in lost rent, damages, legal fees
- Legal mistakes: Improper eviction notice or lease violation = thousands in legal fees, case dismissal, more lost rent
- Maintenance inefficiency: Managers get contractor discounts 20-30%. Your $500 repair might be $350 for them
- Stress and burnout: Midnight emergency calls, difficult tenants, constant availability - hard to quantify but very real
When Self-Management Makes Sense
- Single property near where you live (under 30 minutes away)
- You have time and enjoy property management
- Property is in excellent condition (low maintenance expected)
- You're handy and can do repairs yourself
- Cash flow is tight and every dollar matters
- You're building skills for future portfolio growth
When to Hire a Property Manager
- Multiple properties (3+ units)
- Out-of-state or distant properties
- Full-time job with limited availability
- High-stress career where you need peace of mind
- Property in challenging neighborhood (experience needed)
- You value time over money
- Growing portfolio - focus on acquisition, not management
What Good Property Managers Do
Professional property managers handle: tenant screening with thorough background checks, lease preparation and compliance, rent collection and enforcement, 24/7 emergency maintenance coordination, regular property inspections, vendor relationships and competitive pricing, legal compliance with state/local laws, eviction process when necessary, detailed financial reporting, marketing and showing properties, move-in/move-out inspections, security deposit accounting.
How to Choose a Property Manager
Interview questions to ask: How many properties do you manage? What's your average vacancy time? What's your tenant screening process? How do you handle maintenance (in-house or contractors)? What are all your fees (hidden costs)? Can I see a sample monthly report? How quickly do you respond to tenant issues? What's your eviction track record? Can I speak with current landlord clients?
Red flags: Won't provide references, vague about fees, manages 100+ properties per person (overextended), poor communication during interview, no written management agreement, requires long-term contract (6+ months), doesn't know local landlord-tenant laws.
Hybrid Approach
Some landlords use a hybrid model: self-manage day-to-day operations, hire manager for tenant placement only (one-time fee), use manager for difficult situations (evictions, problem tenants), seasonal management (snowbirds who are away part of year).
Costs: Tenant placement only: $500-1,500 one-time fee, eviction services: $500-2,000, a la carte services: varies. This saves money while outsourcing your weak points.
The Financial Breakeven Analysis
Calculate your true cost to determine breakeven: Estimate hours spent monthly × your hourly rate, add value of stress/hassle (subjective), add cost of mistakes (vacancy, bad tenants), compare to property management fee. If self-management total cost exceeds management fee, hire a manager.
Calculate Your Management Costs
Use our calculators to analyze property management expenses
Try Our Tools →The Bottom Line
Property management costs 8-10% of rent but saves 10-15 hours monthly and reduces risk from amateur mistakes. For one nearby property, self-management often makes sense. For 3+ properties or distant rentals, professional management usually pays for itself in time savings and better outcomes. Your choice depends on your time value, skills, and lifestyle preferences - not just the fee percentage.