So, you own several properties in Maryland, and are considering putting them on the rental market. While most property owners use the services of professional Maryland rental management companies to administer and operate their rental units, some prefer to be DIY landlords. There’s nothing wrong with that approach and, when done right, it may reap huge rewards. However, it also behooves prospective landlords to understand the potential risks and responsibilities involved with self-managed properties.
The Joys of Property Ownership
Owning rental property in Maryland, whether it’s residential, industrial, or commercial units, is a great way to build personal wealth. With real estate values typically appreciating over time, a portfolio of rental offices, homes and buildings is a great wealth-builder.
According to data from the U.S. Federal Housing Finance Agency, All-Transactions House Price Index for Maryland [MDSTHPI], the index rose from 403.66 in Q1-2012, to 599.59 in Q1-2022. That’s a 48.5% increase within a decade! Professionals that offer the best rental property management in Maryland, who watch the index closely, will tell you that this growth is phenomenal. Going back to 1975, that appreciation is 869.27% – unmatched by any other type of investment!
And, while you benefit from such real estate value appreciation, owning rental property also opens the door to receiving a steady stream of passive income. And, if your properties are well-managed, the levels of those income streams can often be much higher than comparable (and not professionally-managed) homes or buildings.
The Challenges of Property Management
As a DIY landlord, especially if you are new to the business, you’ll encounter several challenges that, if you’re not savvy, can be costly – not just in financial terms, but also in reputational and legal terms. Having the benefit of experienced Maryland rental management companies on your team pays off in more than one way. Without such knowledgeable resources to guide them, DIY landlords must:
- …understand the financial aspects of owning, renting, and managing rental property. This includes legal obligations dealing with rental payments, advances, security deposits, and fines and penalties
- …ensure the property’s fitness for rental purpose, including furnace, ventilation, AC, roof, plumbing, and electrical systems. Renting property that does not meet those criteria may expose landlords to legal and financial challenges by tenants
- …meet all Federal, State, City and County mandates, related to management of rental property. For instance, many Counties and Cities in Maryland require rental property owners, who meet certain criteria, to register, or license, their units with local authorities
But that’s just the start! Professionals, working with companies that provide the best rental property management in Maryland, also take it upon themselves to stay up-to-date with changes to the relevant Landlord/Tenant laws and by-laws. Then, there’s the responsibility of landlords to ensure they comply with laws governing housing discrimination.
While DIY property management does offer certain benefits and rewards, staying compliant with regulatory mandates governing rental properties is critical. That’s because the cost of non-compliance is huge – and may lead to financial destruction at the worst, and an inability to rent your property at competitive rates, at the least. More reason to have professional property managers partner with you.