Investing in Detroit’s rental market can be a smart way to build long term wealth, but once you own a property, a new question arises: should you manage it yourself or hire a property manager? The answer depends on whether you’re a local investor or live out of town, as well as your available time, resources, and long term investment strategy.
The Benefits of Self Managing
Managing your own properties means you keep full control over tenants, maintenance, and rental income. For local investors with just a few units, this can be cost effective. You save the monthly management fee and get firsthand experience dealing with tenants and maintaining your properties.
This approach can also be rewarding for those who want to build strong tenant relationships and stay directly involved in every decision.
The Drawbacks of Self Managing
Self management comes with hidden costs, especially in Detroit. Rental properties in the city must comply with local requirements, such as inspections and licensing through the City of Detroit’s Buildings, Safety Engineering, and Environmental Department (BSEED). Staying compliant takes time and knowledge, and failure to do so can lead to costly fines (City of Detroit).
For out of town investors, the challenges are even greater. Handling emergencies, coordinating repairs, or resolving tenant disputes remotely can result in vacancies, travel expenses, and added stress. What may seem like saving money often turns into lost time, unexpected costs, and increased risk.
The Benefits of Hiring a Property Manager
A property manager is a licensed professional or company that handles the day to day operations of rental properties on behalf of the owner. Their responsibilities typically include tenant communication, rent collection, property maintenance, and ensuring compliance with local regulations.
When you hire a property manager, you gain access to local expertise and professional systems. Property management fees typically range between 8 to 12% of monthly rental income. While this is an added expense, the benefits often outweigh the cost:
- Professional tenant screening to reduce risk
- Marketing strategies that minimize vacancies
- Coordination of maintenance and repairs
- Legal compliance with Detroit’s rental ordinances
- Timely rent collection and financial reporting
For out of town investors, this service is particularly valuable. A local property manager acts as your eyes and ears, ensuring that your investment is protected even when you’re hundreds of miles away.
Comparing Costs: Upfront vs. Hidden
Hiring a property manager comes with a clear, upfront fee. But the hidden costs of self management, such as long vacancies, tenant turnover, legal issues, and the stress of being on call 24/7, can be far higher. Well-maintained and efficiently managed properties are more likely to retain tenants and generate steady income.
For many investors, especially those scaling their portfolio or managing properties from out of state, hiring a property manager is less about expense and more about preserving profitability.
Making the Smart Choice in Detroit
So, should you manage your properties yourself or hire a property manager? For local investors with the time and willingness to handle tenants and maintenance, self management can work. But for out of town investors, or those with multiple properties, professional management is often the smarter move.
Detroit’s rental market is full of opportunity, but also unique challenges. Don’t let the stress of management hold you back from achieving your investment goals.
If you’re considering investing in Detroit, now is the time to evaluate whether to self manage or hire a property manager. Contact FIRE Realty Team for expert guidance, access to our trusted local real estate network, and support in finding the right strategy to maximize your Detroit investments.
