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Property management
Whether you manage your apartment building yourself or delegate it to a professional property management company depends on time, expertise, return targets and your desired level of involvement.
Content:
Do you own a multi-family unit and are you wondering whether you should manage it yourself or hire a professional property management company? This decision affects not only your time and returns, but also your quality of life.
Managing an apartment building requires resources, expertise and a high degree of organization. Therefore, owners are faced with the central question: Should the apartment building be self-managed, or should a professional property management company be hired?
This decision affects the time required, property management costs, return on investment and legal security of the multi-family unit. This article provides an overview of both models to help you make an informed decision.
In Switzerland, an increasing number of property owners are managing their multi-family units themselves. This can certainly make sense, especially if the building is relatively small. However, doing so means taking on all of the organizational, technical and legal tasks.
In the case of a multi-family unit, for example, you need to consider whether you have the necessary expertise. In addition to legal knowledge, property management requires business knowledge, organizational skills and plenty of time. If you are prepared to attend courses and familiarize yourself with things like rental agreements, accounting and maintenance plans, you can do many of these tasks yourself. However, if you already have a lot of claims on your time or manage multiple properties, you’ll quickly reach your limit.
Managing a multi-family unit yourself involves numerous tasks that require both organizational skills and legal and technical knowledge. From managing tenancies to coordinating tradespeople and handling emergencies – as an owner you take on all the tasks that a professional property management company would otherwise do. The following examples show which areas can be particularly time-consuming and challenging.
Are you considering doing the management yourself, but don’t know how much work it will entail? As a rule of thumb, buildings with up to 15 residential units can usually be self-managed. Many owners quickly reach their limits if they have large multi-family units or units located in different places. In such cases, a professional property management service is often the better choice, whether due to time constraints, legal requirements or to make your day-to-day life easier.
Those who do not wish to manage a multi-family unit themselves can delegate these tasks to a professional property management company. The company takes care of all the organizational, commercial and technical work necessary for the property to run smoothly.
This saves owners time and ensures legal certainty, optimized property management costs and professional processes.
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Typical fees range between 4% and 5% of the rental income for managing a fully rented multi-family house. These property management costs also include the organization of a caretaker, but not the additional costs for their services or the associated social security contributions.
The exact fee depends on various factors, including the number and location of the properties, the scope of services and the rent level. In regions with low rental levels, the fee may be as high as 7% of the rental income.
An example: If twelve apartments in an apartment building are rented at CHF 1,500 each, the monthly rental income is CHF 18,000. With a 5% fee, owners must budget around CHF 900 per month for management, which can significantly reduce the return on the building.
Whether the fee for a management mandate amounts to 4%, 5%, 7%, or even more or less depends on various factors.
You set the budget when drafting the contract. It specifies the scope of services you require.
When is professional property management worthwhile? To ensure the property management company reliably relieves you of responsibilities and keeps costs within reasonable limits, pay particular attention to the following points:
Whether managing an apartment building yourself or hiring a professional property management company is worthwhile depends largely on your individual priorities, resources and goals. The following overview shows the most important differences between the two options.
Criterion | Criterion | Self-management | Self-management | Professional property management | Professional property management |
|---|---|---|---|---|---|
Criterion | Cost/return | Self-management | No administrative costs, full rental income | Professional property management | 4% to 7% of the rental income is charged as a fee, which reduces the return on the apartment building |
Criterion | Time required | Self-management | High: organization, tenant search and emergencies | Professional property management | Low: management takes care of ongoing tasks |
Criterion | Expert knowledge | Self-management | Legal, technical and commercial knowledge required | Professional property management | Legal, technical, commercial and administrative expertise available |
Criterion | Control | Self-management | Full control over decisions | Professional property management | Partial relinquishment of control, dependence on the competence of the management company |
Criterion | Contact with tenants | Self-management | Direct, personal contact | Professional property management | Distant, less immediate communications |
Criterion | Risk management | Self-management | Owners bear risks themselves | Professional property management | Management company takes over management (voids, emergencies, renovation) |
Whether you manage your apartment building yourself or hire a professional property management company depends on your personal priorities. Managing it yourself makes sense for smaller properties if you have the time, expertise and organizational skills. On the other hand, a professional property management company takes the pressure off in everyday life, ensures everything is legally and technically sound and takes care of risk management – however, the return on your apartment building is reduced by the management fees. Ultimately, it’s a question of how much responsibility you want to take on and how important factors such as quality of life, time savings and security are to you.
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