THE TRUE COST OF SELF-MANAGEMENT

Is Do-It-Yourself Property Management Really Cheaper?

We sometimes hear from do-it-yourself (DIY) landlords who say, “Your management fees are too expensive—I can do it myself for less.”

Let’s break down what truly goes into managing a single rental property over the course of a year into three steps and see if self-management really is cheaper.

Step 1: What Is Your Time Worth?

To evaluate the true cost of DIY property management, we must first assign a value to your time.

According to multiple sources, the average rental property owner earns at least $75,000 per year. Using a standard 40-hour work week over 52 weeks, that comes out to $36/hour. We’ll use that figure for our analysis, although many owners earn much more.

Step 2: The Time Costs of Managing a Rental

Managing a rental isn’t just collecting rent once a month. Below is a time estimate for common tasks, not an exhaustive list of tasks, involved in leasing and maintaining a single property.

For purposes of our analysis, we’ll assume a 1 hour round trip per property visit.

Initial Leasing Process:

• Rent-ready evaluation, including travel – 2 hours
• Establish the work scope and prepare to send it to vendors – 2 hours
• Communicate work scope to vendors and get bids – 2 hours
• Follow-up with vendors, evaluate bids, ask for additional bids, approve bids and coordinate the work – 8 hours
• Confirm the work was completed, including travel – 2 hours
• Marketing video and photos, including travel – 2 hours
• Post the listing on the various websites (Zillow, Trulia, Hotpads, etc.) – 2 hours
• Respond to potential applicant inquiries (email and phone calls) – 4 hours
• Showings (assume 5 showings), including travel – 6 hours
• Receive applications, follow up with missing information – 5 hours
• Answer applicant questions – 2 hours
• Process each submitted application (not every application submitted will be approved) – 3 hours
• Prepare the lease, deliver it to the applicant, answer questions regarding the lease – 3 hours
• Complete the pre-move-in evaluation before tenant move-in – 2 hours
• Meet the new tenant at the property to deliver keys, including travel– 2 hours
• 47 hours on leasing.

Ongoing Management:

• Maintenance coordination (including after-hours, weekends, holidays) – 3 hours
• HOA violations – 2 hours
• Rent collection and tenant ledger management – 3 hours
• Process and pay maintenance invoices – 2 hours
• Mid-lease property check, including travel – 2 hours
• 12 hours for ongoing management

Move-Out Process: (Or Lease Renewal Process. The Lease Renewal Process would be about 8 hours.)

• Complete the move out inspection, including travel – 4 hours
• Create the vendor work scope and send to vendors – 2 hours
• Vendor follow up, confirm all the work is completed correctly, including travel – 4 hours
• Obtain and pay all vendor invoices, complete the security deposit disposition and send it to the former tenant – 3 hours
• Handle the tenant dispute regarding the security deposit disposition – 2 hours
• 15 hours for the move out process

Estimated Total Time: 74 Hours

At $36/hour, that’s about $2,664/year in time value alone—and we’re just getting started.

Step 3: The Invisible Costs of DIY Management

There are numerous other costs that we call “invisible” because most people just don’t think about them. The associated cost also can vary widely for each item, so it’s very difficult to put an actual number on many of them, so we haven’t.

Additional Time Costs:

• Staying educated on Arizona landlord-tenant law, fair housing, emotional support animals, Section 8, etc.
• Stress, mental load, and the time spent thinking about what might go wrong.
• Lost time with family on weekends, holidays and vacations that is spent dealing with the rental maintenance issues, tenant issues, leasing questions, etc.
• Creating a list of reliable vendors to call when you need work done at the property

Out-of-Pocket Costs:

• Purchase an Arizona specific lease
• Rental listing fees for websites
• Application screening software
• Accounting tools
• Constant updates for your lease and systems

Even if some of these are claimed to be a “one-time cost,” most have recurring or maintenance costs. Software typically charges monthly. Leases need regular legal updates. Nothing is truly set-it-and-forget-it.

The total cost is $2,664 + additional time costs + out of pocket costs + stress + not ever being able to be out of touch, etc. The total cost could easily come to $5,000 or more.

And if you earn more than $75,000 per year, the cost can increase drastically…

At $150,000/year, your DIY time cost doubles to over $5,328/year. Then add the additional time costs + out of pocket costs + stress + not ever being able to be out of touch, etc. The total cost could easily come to $7,500 or more.

Conclusion

When you add it all up—time costs, stress, learning curve, and hard costs—DIY management costs significantly more than professional property management.

At Blue Fox Properties, we’ve already built the systems and refined the processes to handle it all for you—efficiently, legally, and professionally.

So the next time you hear someone say, “I can do it myself for cheaper,” we suggest a closer look. Because in reality, their time is too valuable NOT to hire a pro.