Should You Self-Manage Your IRA Rental or Hire a Property Manager?

by Peter Rizzo

Life Settlements in a Retirement Account? Think Again.

If you’ve recently purchased a rental property with your Check Book IRA, LLC, then you probably have an important question on your mind:

Should I self-manage my IRA property, or hire a property manager?

The truth is, this is an ongoing question with no easy answer. Your decision should be based on several different factors, including the time and skills you possess for property management, your budgeting goals, and the type of control you desire over your property.

There are advantages to either self-managing or hiring a professional property manager. On one hand, you can exercise more control and potentially save money by self-managing. On the other, you can offload the work of managing your rental to a professional, and keep yourself fully at arm’s length from your IRA investment.

Managing your IRA property isn’t the same as managing a personally owned rental. With a Check Book IRA, LLC rental there are specific IRS rules that limit how you are allowed to interact with your rental’s upkeep and management.

Let’s explore important differences between self-managing your IRA property and hiring a property manager, and how you can decide which option is best for you.

What is the Role of a Property Manager?

A big part of making the decision between self-managing your IRA property and choosing a property manager comes down to having a realistic understanding of the role of a property manager, and deciding if you are the best person to fill that role.

On a high-level, the role of a property manager includes the following responsibilities:

  • Setting rent rates
  • Marketing your rental property
  • Vetting new tenants
  • Collecting rent
  • Hiring contractors for any maintenance issues
  • Managing move-outs and evictions


Self-Managing Your IRA Property

When you choose to self-manage your IRA property, you have full control, but also full responsibility.

Rather than rely on a property manager to implement their own procedures regarding vetting renters, gathering rent, evicting tenants and more, you can directly handle these various facets of tenant management.

Self-managing your property also means the potential to save money on the cost of a property manager by handling all administrative tasks yourself.

However, you’ll need to make sure you stay in-step with important IRS rules regarding your interaction with your IRA property.

Hiring a Property Manager for Your IRA Rental Property

When you hire a property manager, you’re bringing in specialized experience to help ensure high-quality management of your property and tenant relations

With a professional property manager, you also receive a built-in infrastructure for managing leases, rents, evictions and more.

Although a property manager comes with a price, you can offload the time, energy and headaches it can take to manage your rental property yourself.

However, you need to be sure to identify a quality property manager.  There are many less-than-stellar property managers in the field, and choosing the wrong one can create exposure to the risk of compliance violations, bad tenants, and fraud.

Making sure you take time to properly vet any potential property manager will protect you, your property, your tenants, and your IRA.

How Much Do I Save if I Manage My IRA Property?

One of the key reasons many investors choose to self-manage their IRA property is the perceived cost savings associated with eliminating property management fees.

As the property manager, you can offer showings, screen tenants, sign leases, select vendors, pay bills, and receive rental income.

If you believe you can effectively manage these tasks and get the best tenants in your units, then saving on management fees may make sense.

However, per IRS regulations, you can’t work on your IRA property yourself. Any work needed on your property will need to be hired out to contractors who are not disqualified persons to your IRA.

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