Summary of Should You Self-Manage Your Rentals or Hire a Property Manager? (Rookie Reply)

Overview of Should You Self-Manage Your Rentals or Hire a Property Manager? (Rookie Reply)

In this Real Estate Rookie “Rookie Reply,” Ashley Kehr and Tony J. Robinson answer three common beginner investor questions: how earnest money and due diligence fees work, whether a rookie should self-manage or hire a property manager, and how to evaluate an out-of-state rental market without relying on cherry-picked data. The episode is practical, tactical, and aimed at helping new investors avoid costly mistakes while building confidence in their first deals.

Key Topics Discussed

1) Earnest Money vs. Due Diligence Fees

The hosts break down the difference between the two and explain how they function in a purchase contract:

• Earnest money is a refundable deposit held in escrow and applies toward the purchase if the deal closes.
• Due diligence fees are more common in certain competitive markets and are generally non-refundable, paid to the seller for the right to inspect and evaluate the property during a set period.
• The due diligence period is the time when a buyer can inspect the home, gather repair estimates, and decide whether to move forward or walk away.

Main takeaways

• If you discover major issues during inspections, your ability to walk away depends on whether you are still inside the due diligence window and whether your contract includes contingency protections.
• Common contingencies mentioned include:
  • Financing contingencies
  • Sale-of-home contingencies
  • Rate/loan-related conditions
• Tony suggests using a longer due diligence period on-market when possible, while Ashley notes she often uses a shorter window in her market because inspectors can get out quickly.

2) Self-Managing vs. Hiring a Property Manager

A rookie investor asks whether it makes sense to self-manage a single-family rental close to home when cash flow is only around $200/month.

Property manager costs and considerations

The hosts note that typical property management fees include:

• Around 10% of monthly rent for ongoing management
• A leasing fee, often equal to one month’s rent
• Possible add-on charges for:
  • After-hours calls
  • Maintenance coordination
  • Routine inspections or preventive maintenance
  • Hourly repair work

What rookies should evaluate

Ashley and Tony emphasize that the decision should not be based on fees alone. Investors should consider:

• What exactly the manager handles
  • Bookkeeping
  • Maintenance requests
  • Tenant communication
  • Leasing and renewals
• Whether the investor has time and bandwidth to handle landlord responsibilities
• The investor’s long-term goals
  • If they want a hands-off portfolio, a manager may make sense
  • If they want to learn the business and keep more cash flow, self-management is viable

Their recommendation

• Self-managing is very possible, especially today with better tools, systems, lease templates, and legal resources.
• If self-managing, Tony recommends having:
  • A strong lease
  • A good attorney
  • Clear systems for maintenance, communication, and screening
• BiggerPockets also points listeners to state-specific lease agreements as a free resource.

3) How to Analyze an Out-of-State Market

The final question focuses on how to vet a lower-cost market in the Midwest or Southeast when you don’t know anyone there.

Data points to research

The hosts recommend building your own market-analysis framework using objective data such as:

• Property prices and affordability
• Population growth
• Job market and industry diversity
  • A market with several employers and industries is generally safer than one dominated by a single company
• Crime statistics
• School quality and school zones
• Neighborhood-level livability and tenant demand

Practical strategy

Tony suggests:

• Narrowing the search to 2–3 markets
• Using Agent Finder or connecting with local agents
• Asking agents not just for positives, but also for the negatives
• Comparing agent feedback with your own data

Important mindset shift

The hosts stress that no market is perfect. A good analysis should reveal both:

• The opportunities
• The pain points and risks

Tony gives Buffalo as an example, noting that rising property taxes and tougher eviction conditions are real negatives investors should understand upfront.

Actionable Advice for Rookie Investors

• Use the due diligence period strategically to inspect, negotiate, or exit if needed.
• Don’t assume property management is “set it and forget it”—review all fees and services carefully.
• Self-manage only if you’re willing to be responsive and organized, not just because it saves money.
• Build a market scorecard for out-of-state investing based on real data, not marketing materials.
• Talk to local agents and ask for drawbacks, not just the highlights.
• Use BiggerPockets resources like leases, forums, and agent connections to reduce rookie mistakes.

Notable Insights

• Due diligence exists to give buyers time to uncover hidden issues before fully committing.
• A property manager’s true cost often goes beyond the headline percentage.
• Self-management is more feasible than many rookies think, especially with modern tools and support.
• A market’s health should be judged by fundamentals like jobs, population trends, crime, and school quality—not just cap rate or projected cash flow.

Closing Takeaway

The episode’s core message is that rookie investors should make decisions based on risk tolerance, time availability, and long-term goals. Whether it’s protecting earnest money, choosing between self-management and a PM, or analyzing a new market, the best approach is to be intentional, data-driven, and fully aware of the tradeoffs.