Statistics can be illuminating. In the world of property management, one often hears general statements such as “most landlords can benefit from working with a property manager.” As true as that might be, it’s not a particularly helpful insight. This got us wondering, exactly what percentage of landlords choose working with a property management company?
In the search for hard data, we ended up going further down the rabbit hole than expected. When we emerged, we’d found some fairly surprising statistics about property ownership and property management.
What Percentage of Landlords Choose Working with a Property Management Company?
Most landlords work with a property manager
According to data published in 2020 by the National Association of Realtors, a little over 42 percent of landlords manage their rental properties entirely on their own. So, what about the other 58 percent?
Around 29 percent work with a professional property management company. About 25 percent use a management agent directly employed by the owner. The remaining four percent break down between “other” and “not reported” in the original survey.
Overall, approximately 54 percent of landlords choose to work with a property manager of some kind. While that’s not a vast majority, it is a definitive one.
“Mom and Pop” landlords are more likely to self-manage
The data shows that the fewer units a landlord has, the more likely they are to handle day-to-day management on their own. For example, in a rental property with only a single unit, the landlord self-manages 71 percent of the time. Only 23 percent of single-unit properties rely on a property manager.
However, when you look at larger rental properties with between 5 and 25 units, only about 36 percent are self-managed, while nearly 60 percent utilize a property manager.
Among truly large rental properties—those with 150 units or more—only 5 percent are owner-managed. A little over 91 percent of properties this size rely on some form of professional property management.
More units means more responsibility
All the data so far confirms what you have probably already figured out: the larger a rental property portfolio is, the more difficult it is for the owner or owners to manage it on their own.
That being said, there’s no reason landlords who own only a few rental units can’t also benefit from professional property management. If you manage a rental property on your own, then we don’t have to tell you how challenging that can be.
Why landlords rent their property
Another survey, this one published by SmartMove, asked rental property owners about their attitude toward being a landlord. For most, it’s about the money in one way or another.
In this survey, 35 percent of landlords said that they rent out their property for the extra cash, while 34 percent said that they see their rental property as a long-term investment.
Only 27 percent said that their main reason for renting was because they enjoyed keeping it as a rental property. It’s great to be able to do something you love, but for everyone else, signing up for property management services can mean fewer headaches.
How Property Management Helps
Let’s look at one last set of data. In a landlord survey from Porch.com, over 88 percent of respondents said that they had experienced stress in renting out their properties.
Nearly 49 percent said that they’d had at least one tenant break their lease early. Over 44 percent had to evict a tenant. And nearly 41 percent had a tenant suddenly stop paying rent.
These are all problems that self-managing landlords must handle on their own, and they are also issues that a professional property manager can take care of for you. Contact us today to learn more about property management.