Landlord vs property manager—what’s the difference? Many people get the two terms confused, substituting one for the other. While landlords and property managers do share some similarities, they aren’t one and the same.
Landlord vs Property Manager: A Breakdown
Is a property manager the same as a landlord? In a word, no. By the barest of definitions, a landlord owns the rental property, while a property manager professionally manages it for the owner.
What Is a Landlord?
A landlord is a person who owns a rental property and leases it to tenants. The landlord’s responsibilities include searching for tenants, setting rental rates, collecting rent, resolving tenant issues, and ensuring property maintenance. The landlord is also in charge of enforcing the terms and conditions of the lease agreement.
What Is a Property Manager?
A property manager is someone who professionally manages a rental property. They receive compensation from the property owner or landlord for their services. They act on the landlord’s or owner’s behalf, performing tasks that the landlord would otherwise need to shoulder. Thus, the landlord’s responsibilities may be delegated to the property manager.
Differences and Similarities Between a Landlord and Property Manager
To get a deeper understanding of the difference between a landlord and property manager, let’s break them down below.
Ownership
The first thing that separates a landlord from a property manager is property ownership. A landlord owns the rental property – they choose to lease it out to tenants. In contrast, a property manager does not own the rental property they manage. Instead, a property manager offers their management services to rental property owners for a price.
Responsibilities
Managing a rental property comes with the following responsibilities:
- Finding and screening tenants
- Setting rental rates
- Preparing budgets
- Collecting rent
- Conducting property inspections
- Preparing lease agreements
- Maintaining the rental property
- Handling repairs
- Hiring and coordinating with vendors
- Responding to and addressing tenant concerns
- Enforcing the lease terms
- Ensuring legal compliance
Without a property manager, landlords or rental property owners must fulfill the above responsibilities alone. Property managers can take on these responsibilities and perform them on behalf of landlords. They serve as a point of contact, liaising between landlords and their tenants.
They can also provide financial statements or reports and help landlords with tax preparation. Depending on the property manager or management company, services can include eviction assistance. If a tenant breaks their lease and warrants an eviction, property managers can help initiate and oversee eviction proceedings.
Compensation
Landlords receive compensation in the form of rental income. Because they own the rental property, the rent tenants pay them directly. Landlords will then use this revenue to pay for maintenance, upkeep, administrative costs, etc.
In comparison, property managers receive compensation from the rental property owner. They either charge a fee or receive a percentage of the rental income as payment. They do not use any portion of their payment to settle property management expenses. Instead, landlords supply property managers with funds or a budget.
Property Management vs Self Management: What to Choose
Managing a rental property takes work. Many challenges are involved, not all of which a landlord is prepared to overcome. That said, before making a decision, rental property owners should consider the pros and cons of each option.
Pros and Cons of Self-Management
The pros of being a landlord include the following:
- Control. Landlords have complete control over their rental properties. As such, they make all the calls regarding managing and maintaining the property.
- Profit. Landlords stand to earn a larger profit because they don’t have to share their income with a professional property manager.
- Tenant Relationship. Landlords can interact with their tenants directly, allowing them to build stronger relationships with them. This may help boost retention rates.
The cons of being a landlord include the following:
- Responsibility. Landlords must shoulder all the responsibilities of managing a rental property. They must do all the work and need someone to rely on for professional advice.
- Time. Landlords must commit a large chunk of their time to managing their properties. If time isn’t something they can give, landlords would be better off hiring a property manager.
- Location. Landlords must remain close to their rental properties. It’s nearly impossible to manage one from a far distance, considering the nature of the work.
- Liability. Landlords must comply with federal, state, and local laws. That means staying up-to-date on all relevant laws and legislative changes, which would be time-consuming and tedious.
Pros and Cons of Property Management
The pros of hiring a property manager include the following:
- Stress-Free. Property managers assume most of the responsibilities of landlords. This allows landlords to reduce their workload and live a generally stress-free life. Say goodbye to the worries of property management.
- Time and Location. For many landlords, managing a rental property is simply a side gig—a source of extra income. Hiring a property manager would free up time for landlords to do other things and mean they wouldn’t be stuck in a single place.
- Expertise and Experience. Property managers are trained to do their jobs. They have the right educational background and ample experience that make them qualified for the position. Landlords would want someone who knows what they’re doing.
- Legal Know-How. Property managers understand the laws that may affect property management. It’s also their job to keep up with any changes to the law. This helps ensure that the rental properties they manage remain compliant.
The cons of hiring a property manager include the following:
- Control. Hiring a property manager means landlords must surrender some control over their property.
- Tenant Relationship. With a property manager, landlords would lose direct contact with their tenants, jeopardizing the landlord-tenant relationship. Of course, that does not mean landlords are forbidden to interact with tenants altogether.
- Cost. The most glaring con of hiring a property manager is that it doesn’t come free of charge. Property managers are professionals, which means landlords must pay them for their services.
Landlord vs Property Manager Explained
Landlords and property managers are different, though they may share similar qualities. Being a landlord can be a fulfilling job and a great way to supplement your income. However, it’s not for everyone. Sometimes, hiring a property manager is simply the wisest choice.
Are you looking for a competent rental property management company in Florida? Surfrider offers premier rental management services. Call us today at 727-403-7088 or contact us online for more information!