Key Points:
Self-managing landlords must follow the same legal rules as third-party property managers.
Rental laws require strict compliance with security deposits, lease terms, and maintenance timelines.
Managing a rental property requires time, knowledge, and patience.
Sometimes, real estate owners consider converting their primary homes into rental properties. This may be done to take advantage of low interest rates and the attraction of owning investment real estate. Once that decision is made, the next crucial question arises: should I self-manage or hire a professional property manager? There is no universal right or wrong answer—for some, hiring a professional property manager is the best decision, while others may have the knowledge and ability to successfully self-manage. To determine the best course of action, several key considerations should be taken into consideration.
Do the Same Rules and Laws Apply?
A common misconception is that rules, regulations, and laws apply only to professional property management companies. However, legal requirements, including fair housing rules, emotional support animal requests, applicant screening, and lease terms, all apply. The current federal, state, and local levels of governing rules usually apply equally to all landlords, whether managing independently or through a third-party property management company.
Several key legal considerations apply to BOTH self-managing owners as well as third-party property management companies:
Security Deposit Limits
Colorado law limits security deposits to no more than twice the monthly rent. Charging more than this amount is illegal and can lead to significant legal consequences.
Acceptance of Portable Tenant Screening Reports (PTSRs)
Landlords must accept valid PTSRs from applicants and cannot charge an additional application fee if one is provided. Violating this rule can result in financial and legal penalties. You can learn more about PTSRs here.
Lease Agreement Must Include Required Language
A generic lease agreement found online may not comply with Colorado’s evolving rental laws. Specific language is required and certain outdated provisions are now prohibited. Some sections of the lease must also be provided in Spanish.
Maintenance Timeline Rules Apply
Colorado law enforces strict response timelines for maintenance requests related to habitability concerns. Delays in addressing required repairs can result in financial liability to property owners.
Must Accept Subsidized Housing
Housing vouchers and other governmental subsidized income sources must be accepted as a valid form of rent payment. Denying a tenant based on the source of income violates fair housing laws and exposes the property owner to significant financial penalties.
Three Qualifications to Self-Manage
For those considering self-management, three key factors should be considered:
Do I Have the Knowledge?
A thorough understanding of fair housing laws, lease regulations, and tenant rights is crucial. Legal compliance helps prevent costly mistakes and potential legal action. For example, handling service animal requests requires following specific guidelines to avoid discrimination claims.
Do I Have The Temperament?
Managing rental properties requires patience and professionalism. Late rent payments, maintenance disputes, and tenant concerns are common challenges. Staying calm and handling situations objectively is essential for a successful rental experience.
Do I Have the Time?
Managing a rental property requires time and availability,. It includesadvertising, property showings, tenant screening, maintenance coordination, and emergency response. Tenants often need assistance at inconvenient hours, asoprompt attention is required.
Making the Right Decision
While self-managing will avoid the expenses that professional property management companies charge, it requires time, knowledge, and a willingness to navigate legal complexities. Professional property managers handle these responsibilities, ensuring compliance and reducing stress for property owners.
At Grace Property Management, we believe that when property management is performed with integrity and transparency, both tenants and landlords benefit. Property management is not just our business - it is a relationship between us, our owner-clients, and our tenant-residents.
If these are important to you, we may be a good fit to provide you, your property, and your tenant-resident with our full-service property management services.
Feel free to reach out to us for assistance.
