Self-Managing Owners vs. Professional Property Management
Time Versus Money. Pick One.
By Brian Tanaka, Designated Managing Broker, Firefly Property Management
My name is Brian Tanaka, and I'm the Designated Managing Broker and owner here at Firefly Property Management, based in Bloomington-Normal, IL. I'm also a licensed real estate broker in Texas and Virginia. Today's topic is self-managing owners versus professional property management: time versus money. Pick one.
The Trade-Off: There's No Free Option
Every owner pays one way or the other.
Self-managing, you pay in time. That means hours: phone calls, rent collection, vendors, screening, maintenance and so on.
Hiring a professional, you pay in money, through a management fee or leasing fee. You get your time back.
Neither option is really wrong. What I want to share with you is that you pay either way, and there really is no free option. It depends on your goals and where you want to go.
Is Rental Property Ever Truly Passive Income?
I personally believe there's no such thing as truly passive income in this kind of real estate investing. I'm not talking about REITs. I'm talking about actually managing a home.
Even with a property manager, let's say you have a repair limit of $500. Unless it's blood, flood or fire, the manager is going to need your OK. So even if you're on the beach in Hawaii and the water heater goes out and it's $1,800 to replace, they need your approval.
That is active management. You're either always on self-managing, or you're always on with a trusted advisor.
ROI Calculator Here: https://www.fireflymanage.com/roi-calculator
Why Owners Usually Call a Property Manager
In my experience, owners usually call us because there's already a problem. Here are the examples I see:
- A bad management experience. The rent isn't sent on time, or you feel like you're being nickel-and-dimed on maintenance.
- What I call "do-it-yourself Zillow." Ultimately, that's to save money, but the trade-off is time.
- It's hard to take the emotion out of it. With a lot of self-managing owners, renters seek out private landlords. You hear a really compelling story, and it might be true. When people are really pleading their case to you, it's hard to say no.
- 10 to 12 months into the lease, the rent stops. Or they move out and leave thousands in damage, and ultimately that hits your bottom line.
Rental Application Fraud Is Real
Here's what I saw during the COVID pandemic, and it has carried on to this day. I was at a company doing approximately 100 leases a month in peak season. Over about two years, I saw just under five fraud cases, but they were significant. We're talking thousands of dollars in costs, even upwards of $10,000.
When you really dug deep (and of course, hindsight is 20/20), you'd find fake Social Security numbers and altered pay stubs. You typically look for the offset in the numbers. In screening, the report may flag that the Social Security number wasn't issued before a certain date, which requires further verification, or the report may not come back at all. It may look like there's a credit freeze. Meanwhile, somebody is pressing you: make a decision, make a decision. And now, with the rise of AI, forging is even easier.
So what's the end result? You're staring down the barrel of an eviction that could be 30 to 60 days out, with no rent coming in. You're looking at a minimum of $5,000 to $10,000 in lost rent and expenses that come back to the owner. That's what I call money not seen is money lost.
Tenant Screening Red Flags: Questions to Ask Before the Keys Change Hands
What I say is: verify, don't assume.
- Does the report suspect the Social Security number was recently issued?
- Do the pay stub numbers look a little off?
- Is there a real employer you can call to actually verify the person's employment?
- Is the landlord the applicant's friend or a family member?
The Best Applicants Are Never in a Hurry
I've screened thousands of applications myself, and what I will say is that the best-qualified applicants are never in a hurry. They're always willing to wait for a decision, maybe three to four days. The riskiest applicants are usually the ones who needed a decision an hour ago or a day ago. That can throw you off your game, because they're pushing you out of your comfort zone, whether on purpose or not.
"But I Have the Money!": The Prepaid Rent Red Flag
Another red flag I often point to is "But I have the money, but I have the money." That is always an immediate red flag.
When you dig deeper, what do you find? Weak credit. No rental history. Let's say someone is in pre-foreclosure and wants to prepay 12 months of rent in advance. Well, what happens in month 13 or 14, when the rent comes in late? The money looked good, the money ran out, and now you have legal costs.
Maybe the credit screening didn't come back strong, or there wasn't verifiable landlord information, but the money was good. Well, now we're in trouble. Cash never replaces comprehensive tenant screening.
The Pattern: Different Stories, Same Ending
Here's the pattern I see:
- A shortcut at move-in: fraud, a friend, a rush, cash up front.
- It looks fine at first. Time passes.
- It goes south.
- Then you call a property manager.
A reputable, experienced property manager usually brings court and attorney experience. The lease is a contract both sides agreed to, and that's usually why you have to go down that route.
Why Hire Firefly Property Management? Owners Are Not Numbers
We believe in people and relationships first, through personalized, hands-on service and better communication. I've been the owner handing over the keys, and I've also seen it from the resident side, which is actually how I got into this industry.
- No more chasing rent or late-night calls. Owners always know what's happening.
- Transparent pricing, no hidden fees. It's a strategy, not an expense.
I started Firefly Property Management because managers too often treat owners like numbers. I'm your trusted advisor, someone you can literally hand the keys over to.
Vacancy Loss Calculator: https://www.fireflymanage.com/vacancy-calculator
Experience You Can Trust
- Managed over 2,200 homes at one firm and 500 at another
- Licensed in three states: Illinois, Texas and Virginia
- Well versed in compliance laws and how those laws change
- Full time in this industry since 2018
- An investment property owner myself
We maximize your investment while doing right by the residents who call it home.
Frequently Asked Questions
Is self-managing a rental property cheaper than hiring a property manager?
There's really no free option. Self-managing, you pay in time: phone calls, rent collection, vendors, screening and maintenance. Hiring a professional, you pay a management or leasing fee and get your time back.
Is owning a rental home passive income?
I don't believe there's such thing as truly passive income in managing a home. Even with a property manager and a $500 repair limit, the manager needs your OK on anything bigger, unless it's blood, flood or fire.
What are the biggest tenant screening red flags?
A Social Security number the report suspects was recently issued, pay stub numbers that look off, no real employer you can call to verify, a landlord who's a friend or family member, applicants in a rush, and "but I have the money."
Why is prepaid rent a red flag?
Prepaying 12 months up front can cover weak credit or no rental history. When the money runs out in month 13 or 14, the rent comes in late and you're facing legal costs. Cash never replaces comprehensive tenant screening.
How much can a bad tenant cost a landlord?
In what I've seen, an eviction can be 30 to 60 days out with no rent coming in, and at least $5,000 to $10,000 in lost rent and expenses.
Thinking About Property Management in Bloomington-Normal? Reach Out Anytime
If you're thinking about management or you feel stuck, feel free to reach out anytime. I offer free advice to owners, brokers, anyone.
Call or text: 309-336-8935
Email: brian@fireflymanage.com
Web: fireflymanage.com
Time versus money. You pick one.
About the Author
Brian Tanaka is the Designated Managing Broker and owner of Firefly Property Management in Bloomington-Normal, IL, and a licensed real estate broker in Texas and Virginia. He has managed over 2,200 homes at one firm and 500 at another, has worked full time in the industry since 2018, and owns investment property himself.
Managing Broker License: 471.023195
Firm License: 481.014703
Property management expert since 2018.
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