enting a Home From A Private Owner VS Property Management Company

Renting a Home From A Private Owner VS Property Management Company

By: Ron Sudman
December 4, 2019  | 

Houses For Rent By Owner or Houses for Rent By A Property Management Company?

The answer really boils down to your preference. There are pros and cons to both sides of the coin. In this article, I will share with you the good, the bad, and the ugly that I have witnessed in the property management business. So, let’s dive in!


What is a Landlord?

  1. a person or organization that owns and leases apartments or single-family homes to others.
  2. a person who owns and leases land, buildings, etc.
  3. a person who owns or runs an inn, lodging house, etc.
  4. a landowner.

Definition of Property Management

Property management is the leasing, operation, control, and oversight of properties as used in its most broad terms. Management indicates a need to be cared for, monitored and accountability is given for its useful life and condition. This consists of servicing Owners and Residents (Tenants) of the property.

You don’t need your property management company or landlord/owner to be your friend. But you should expect maintenance issues, repairs, or other issues to be handled promptly. Reasonable rent increases (if necessary), respect for your privacy, and other resident rights you have. But an important factor is to have honest and clear communication.

As a side note, there are scammers out there posing as the homeowner or a property management company. To avoid a scammer, be sure to read the article, Rental Property Scams: 7 tips to avoid being scammed.

What are the differences between renting a home from a management company or a private owner?

A property management company manages the property for the owner and is the middleman between residents and the owners. The property management company manages several different properties for several different owners. The property management company will handle the maintenance requests, rent collecting, and issues with residents. As a tenant of a property management company, you most likely will never meet or deal with the owner.

When a resident chooses to rent from a private owner/landlord, they are in turn renting from the owner of the home. Landlords/Owners can often create their own leases, and they are the ones that determine rent and security deposit amounts. They are the ones that handle maintenance requests, handle any inspections at the property and more.

Policies and Rules

When it comes to policies and/or rules, property management companies will have a rental lease, policies, and procedures for every property they manage. For example, regarding pets, many property management companies have breed restrictions, size, and weight limits. If your pet happens to be a restricted breed or over the size and/or weight limit, you may not be able to lease any properties managed by that property management company.

An individual landlord tends to fly by the seat of their pants. Since they own and operate their buildings and homes, they are more willing to negotiate conditions of the lease regarding such matters as the breed and size of your pet. On the flip side, they may charge you more for a pet than a property management company would.

Security Deposits

Often times a landlord will charge first and last month rent plus some sort of security deposit. In California, a landlord can charge up to 200% of the rent for an unfurnished home this includes a pet deposit. The security deposit is then held by the landlord personally and is refunded, hopefully, at the end of your lease agreement. It is hard for landlords to be open-minded when charging for repairs that you may or may not be responsible for. You’ve heard the old expression “the fox guarding the henhouse,” well that applies here.

On the other hand, when using a property management company usually charge one month’s rent or up to 150% of the rent for a security deposit. They will hold the security deposit in a non-interest-bearing trust account. This keeps the owner from accidentally spending the money or refusing to refund the money. The management company is responsible for conducting the walk-through and making decisions based on what the law deems is ethical to charge. Sometimes the management company is caught between a rock and a hard spot when it comes to dispersing security deposits. Trying to please the owner and the tenant is not an easy task.

True Story

Recently, I encountered a tenant that was renting from a private landlord. Things were going along swimmingly when suddenly, there was a 30-day notice to vacate on the door. Being the responsible tenant, this person paid the last month's rent and began the process of looking for a new home. Days before the tenant moved out she came home to find a notice on the front door from the bank…the landlord had not been paying the mortgage and was losing the house. Come to find out the landlord had also filed Bankruptcy making it next to impossible for the tenant to get any of her security deposit back. The deposit was long gone, right along with the house she had been living in.

Inspections and Maintenance

A professional property management company will adhere to their policies and procedures pertaining to items such as conducting move-in inspections and rekeying locks with every new tenant. They are less emotionally involved than an individual landlord/owner. An individual landlord may be more responsive to your needs. But keep in mind, this individual attention may sometimes be more bothersome.

Maintenance and/or requests for repairs can also be attended to differently. Many property management companies have a maintenance department that has specialized repairmen for each situation. With this, repairs and/or maintenance issues may be handled quickly and smoothly. Most property management companies will make sure the vendors they use are licensed, bonded, and insured.

Individual landlords/owners do not usually have repairmen on standby. Instead, they make small repairs themselves and contract the larger problems out to other vendors. Since landlords/owners often have their own jobs, you may have to wait longer for repairs. Additionally, landlords may go the “cheapest” route instead of the “best” route for repair to save money.

Beauty is in the Eye of The Beholder

When it comes to making a property rent-ready for you and your family, landlords and property management companies alike land all over the map on this issue. Some management companies leave it up to the landlord to say what repairs will be done or not to the property and will rent the property in any condition. And then you walk into the property and think to yourself “Are they serious? Would they move their families into a property like this? How much rent did they want for this property?”

Landlords often think that it’s just a “rental” property, the tenant is going to mistreat the property, why would I put money into something they will destroy. They often miss the point; their property will be a “home” to a family. Landlords don’t take just 5 minutes and look at the home from the “eye of a tenant.” See this family would like clean carpet in good condition, not dirty carpet with holes in it. Clean toilets, counters, doors that close and lock, a safe home for their children to play in.

Fair Housing Guidelines

Individual landlords and property managers, alike, must follow and abide by the landlord and tenant laws in your state as well as Fair Housing rules & regulations. Landlords tend to think that they don’t have to follow the same Fair Housing Laws as property managers because they only have one property. However, Fair Housing Rules and Regulations apply to property managers and Landlords.

How to Choose?

It’s not always black and white when deciding between renting with a property management company or renting from an owner. Often times it boils down to qualify for the home. Property management companies can be stricter than individual owners. They tend to look at credit scores, payment history, employment history, etc. And while it’s true, that landlords sometimes run the same checks and balances they might be more willing to overlook things that a property management company wouldn’t.

However, property management companies, like Management One follow policies and procedures as laid out in the rental agreement. They won’t show up unannounced at all hours of the day just because they want to. They will get repairs done timely, usually, using licensed, bonded, and insured vendors.

When deciding between two homes, one managed by a property management company and one by a landlord, ask them both these questions:

  1. What is your pet policy?
  2. What happens to my security deposit?
  3. How do you handle maintenance issues?
  4. What is your policy for inspecting the home?
  5. What is your Fair Housing training?
  6. What is your qualification process?

Based on the answers to these questions, you and your family can make the best decision for your needs.

Management One believes in making every house a home. We believe that properties should be in good condition, in a condition that we would live in with our family. We have a dedicated team of vendors that complete repairs quickly. We attend Fair Housing seminars annually. If you are looking for a home to rent, visit managementone.com to find your next home.

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