The difference between a landlord and a property manager is a matter of ownership. A landlord owns a rental property, and may or may not manage it personally. A property manager manages a rental property, but does not own the properties they manage.
Read on to learn more about the distinction between landlords and property managers.
Landlords
A landlord is a property owner that rents a the home, apartment, mobile home lot, condo, or other of property. Some landlords manage their own properties and work directly with tenants, while others hire property management companies to run the rental property on their behalf.
In some cases, a landlord may be a single person, a couple, or a family that owns a property. However, it can also be a company, partnership, or other entity. The key is ownership: as long as the business owns the property it’s renting out, it technically qualifies as a landlord.
Property Managers
A property manager is a third party that manages a rental property for an owner. The property manager doesn’t own the properties they oversee. However, they are usually fully responsible for all issues relating to the rental, including communicating with tenants, handling maintenance, and more.
Property managers may be part of management firms. There are many property management companies that oversee the operation of buildings owned by many different clients.
However, it can also be an employee of the property owner. An employee technically qualifies as a third-party, as they don’t have any ownership stake.
Landlord vs. Property Manager: Key Differences
The biggest difference between landlords and property managers is property ownership. While landlords own the property they rent out, property managers oversee properties on an owner’s behalf.
However, there can be other distinctions. For example, landlords usually run a smaller portfolio of rental properties. This could be a few homes, a smaller multi-family building, or something similar.
Property managers may oversee a broad portfolio of properties. This might include large multi-family complexes, numerous rental homes owned by a variety of people, several smaller multi-family buildings, or a combination.
In some cases, the property manager is associated with a property management firm. With this, owners contract with the company to have their homes or other units rented out to qualified tenants. Usually, they pay the firm based on the rent collected, agreeing that the property management company gets to keep a percentage of the income.
In other cases, a property manager may be the employee of the owner, receiving a salary for handling tenant issues, building maintenance, and other operational needs. This is more common for owners with a large portfolio of properties or that have bigger multi-family complexes that need running, as it may be more cost-effective than contracting with a company for that number of units.
With a property manager arrangement, the property’s owner is pretty hands-off. While they may have to approve certain tasks, repairs, or maintenance requests, they typically don’t have any more involvement than that. In many cases, the tenant will never meet or have any contact with the owner of their rental unit and might not even know who the owner is at all.
Landlord vs. Property Manager: Which One is Better?
If you want to figure out which is better, working with a landlord or a property manager, it’s best to look at some pros and cons. Here’s what you need to know.
The Pros and Cons of Having a Landlord
When you work with a landlord, you’re dealing directly with the property owner that is usually managing a smaller portfolio of housing units or even a single rental home. The landlord may care more about keeping the property in good shape and ensuring tenants are happy. That way, their investment remains sound, and their source of income is reliable.
Another plus is that a landlord may be more inclined to give you some leeway if the need arises. The connection between a tenant and landlord tends to be more personal, so they may be open to giving you more time to pay your rent if you experience an emergency. But it’s important to note that it isn’t universal, so keep that in mind.
A customized lease is another potential benefit. Landlords can work with tenants one-on-one, and they may be open to non-traditional rental terms, like shorter or longer than average lease agreements, adjusted timelines for providing deposits, and more.
However, it may be more likely that a landlord will become overwhelmed by their responsibilities, especially if overseeing their properties isn’t their only job. Maintenance requests may not be addressed as fast, for instance. Additionally, they may be harder to contact quickly in an emergency, especially outside of daytime hours, during holidays, or if they head out of the area for a vacation or other purpose.
In some cases, landlords may have less cash immediately available for substantial repairs, as well. This could cause delays or may cause them to seek out a cheaper contractor, leading to subpar repairs.
The Pros and Cons of Having a Property Manager
With a property manager, things tend to be all business. The relationship between a property manager and tenant is often more formal, something that comes with its own benefits and drawbacks.
Property managers tend to adhere more strictly to the lease. As a tenant, this can be helpful, as you know exactly what to expect. The rules are spelled out clearly, and you can be certain that they’ll be followed.
Additionally, there are usually official processes for all kinds of tenant needs. Maintenance requests may go into a ticket system, allowing you to know when it’s viewed and monitor the progress easily. In some cases, larger complexes or properties managed by a firm may even have maintenance personnel on staff or on-call, allowing them to handle problems faster.
However, the formality also means you may not be able to get any leeway to deal with the unexpected. For example, if an emergency means you’ll be late with the rent payment, you may not have the ability to negotiate for more time.
In some cases, monthly rent costs, application fees, or deposits will also be higher on rentals that use a property manager. Usually, this is because the rent is offsetting some of the costs of paying the property manager’s salary or the managing firm’s fees.
Property managers may have higher availability than you’d get with a landlord. It may be easier to reach them during an emergency, especially if they are associated with a larger firm or an on-site office with multiple staff members. In some cases, 24/7 assistance may be part of the package, so you’ll know you can get help whenever the need arises.
Deciding Which Is Best for You
Ultimately, whether a landlord or property manager is best for you depends on your unique situation. Landlords may be able to offer a level of customization. Additionally, they may be more personally vested in keeping you happy and the property well-maintained.
However, with a landlord, you may sacrifice accessibility and timeliness for repairs. Additionally, a landlord may become overwhelmed with their responsibilities, especially if overseeing properties isn’t all they do.
Property managers clearly outline what you can expect. While that means the arrangement tends to be more rigid, you can benefit from some of the formality. Faster repairs may be possible, and 24/7 support is more likely.
But if you run into a difficult situation, a property manager might not work with you. Similarly, customized lease terms might not be an option.
In the end, you’ll have to decide what’s more important to you. Once you do that, you’ll be able to head in the right direction based on your needs and preferences.
