Every real estate investor will ask themselves this question at some point. There a few factors that usually push investors one way or the other. Take these items into consideration:
Size of portfolio - How many properties do you own? The larger the number the more difficult it becomes to manage. If you are not willing to devote increasing amounts of time to managing your properties, and do not want your investment options to be restricted to what you can personally manage then you might want to consider using a property management company
Location of properties - The further they are from you and the further they are from each other the more time you spend traveling to each the higher the likelihood you will not keep as close of an eye on each property as is needed. Additionally, if you have considered buying property in other parts of the country, or other countries, you will likely be forced to hire a property manager in that area (landlording from afar is generally a bad idea).
Experience - Landlording requires a number of distinct skills that you may or may not have experience with. Things like maintenance and repairs, understanding of landlord tenant law, book keeping, marketing, etc. If you have previous experience in any of these areas you will have a leg up, if all these things are new to you it can be a lot to take on at the same time. While many landlords learn these skills and self manage the reality is that a professional manager will always have the advantage over part time landlords because they have years of experience performing these tasks on a daily basis.
Willingness to deal with stress - Some say good landlords are born others say they are made. Either way it takes a special kind of person to be able to handle dealing with tenants. You may consider yourself a tolerant or thick skinned person, but ask yourself how you would deal with the following scenarios:
- Domestic disputes
- Tenants damaging your unit
- Getting sued by your tenant
- Habitual late payment of rent
- Tenants disturbing or getting in fights with the neighbors
- Dealing with a professional tenant
- Overzealous maintenance requests
- Dealing with someone who is angry or just generally difficult
Does this stuff happen all the time? No, but when it does it has to be dealt with a in efficient and professional manner. If you feel like you can handle the stress these situations would present, and you think doing so is worth saving on the management fees then it may be in your best interest to manage your own properties.