Renting from corporate landlords versus private landlords can offer two very different experiences. Each has its pros and cons and can be the right fit depending on your needs.
Property management firms oversee most properties owned by corporate landlords. These may include real estate investment trusts (REITs), which allow investors to put their money into a wide range of properties. The largest one in the U.S. is Starwood Capital, a REIT in Miami that had 115,000 rental units in 2022, according to Statista.
Many private landlords with smaller holdings manage their own properties. The 2018 census data found that individuals own about seven-in-ten rental properties, as reported by Pew Research. The tasks they’re involved in may include tenant screening, property upkeep and rent collections.
As you can imagine, a private landlord may offer a much more hands-on approach. Renting from a corporate landlord places the majority of responsibilities on a property manager.
Let’s break down the differences and explore which type of landlord may be right for you.
Property repairs and maintenance
According to Porch, landlords, on average, receive about six repair calls per year from tenants. If something breaks down in your rental, you call a private landlord directly.
The time you may have to wait for a repair or replacement depends on their responsiveness and the availability of tradespersons in the area. Of course, if your landlord, who is also a contractor, lives next door, you can expect fast and more personal service.
A property management firm usually requires filling out forms which are then directed to maintenance. This may result in timelier requests, depending on the number of properties under their care and how busy maintenance is. If they’ve been in the business for a while, they may also have vendors in place for specific requirements. Many also offer 24/7 service in emergencies, such as blocked plumbing.
Direct communication
Renting from a private landlord translates to direct communication between you and the owner of the property. This direct line may offer greater flexibility as the owner might handle requests on a case-by-case basis.
For example, if your past entailed a rough patch that resulted in a low credit score, a private property owner is more likely to work with you. Should issues arise during your tenancy, such as a delayed rent payment, you may be able to talk to your landlord and work out a payment plan.
A larger firm usually has stricter policies and procedures in place. As a result, they are often less flexible when it comes to pet policies, lease terms, deposits and rent prices. You may also pay slightly more for a rental that a professional property manager oversees, as the owner must factor in their costs.
Interacting with your landlord
A private landlord may live nearby. While this may result in faster repairs, it can also lead to running into each other regularly. Depending on their nature, this may be a welcome addition or an uncomfortable intrusion.
Unless you make friends with your property manager, chances are you will rarely meet up. These professionals are usually busy keeping their properties running smoothly and rented out.
Procedures and protocols
A landlord’s role is to provide a secure and safe home. While most private landlords take this seriously, they may not always know the acceptable minimum standards.
A professional management firm knows the law and has procedures and protocols in place for their rental units. These companies are generally trained and licensed in real estate.
For instance, if a wild animal, such as a skunk, decides to make a home under your deck, they may have experienced this before and understand the immediacy. They may also know wildlife relocators in the area to contact.
On the downside, written protocols may also include a faster response to a late payment. One study found that some large corporate landlords were more likely to file eviction notices.
The importance of amenities
Private landlords generally oversee single homes or smaller multi-family units. Taking care of the lawn and yard and plowing snow in the winter may fall under the responsibility of the renter. On the plus side, this property type can offer greater privacy.
In contrast, large multi-unit apartment buildings tend to attract corporate landlords. These may offer many amenities, including swimming pools, gyms, tennis courts and security. Consider your lifestyle and preferred setting when selecting a property that could be your home for a year or more.
Checking out your potential landlord
Just as a landlord checks their tenants, you should appraise your landlord. If a property management firm, check their credentials. For instance, if they are a member of the National Association of Residential Property Managers, you know they receive ongoing education and training and agree to abide by ethical standards. You can also check their ratings on Yelp.
If a REIT or other corporate landlord owns your rental, Google them to see if they’ve made the headlines, for better or worse.
If they are a private landlord, check for reviews and watch for rental scams. If possible, talk to current renters. Ask about anything especially important to you, whether maintenance, privacy or noise level.
What type of landlord is right for you?
If you enjoy a personal, hands-on experience, you may want to consider a private landlord. If you’re looking for a business-minded professional that goes by the books, a corporate landlord and professional management firm may be your best bet.
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