Self Managed and Fee Managed Rentals

There are two broad ways to run a rental, by the owner or by a hired manager, and Sandhills Real Estate, the company Richard Joseph Spinelli cofounded, describes itself in owner operator terms, resting on a single Bronx neighborhood, a single renter base and upkeep reachable by walking. The other way is to hire a management company and pay it a fee to do the running. The Institute of Real Estate Management puts the split in one line: an owner can put a manager on its own payroll or reach one through an outside management company, and which of the two applies changes the nature of the work.¹ This entry sets the two models against each other, and the evidence points to one factor above the rest in deciding between them, which is the size of the property.

The two models

In a self managed rental, the owner or the owner’s own employees do the work. They advertise vacancies, choose tenants, sign leases, take repair calls, send out staff or contractors, and answer to residents. In a fee managed rental, a hired company handles those tasks, and what remains for the owner is choosing the firm, telling it what to aim for and judging how it did.

IREM describes the outside firms as companies that specialize in management services for individual and institutional owners in exchange for a fee, which is why their staff are known as fee managers or third party managers.¹ Real estate houses that offer many services sometimes have a management department working on the same basis.¹ The self managed side runs from an individual landlord with a single house up to a development company whose managers run the properties the company built and owns.¹

Neither label says anything about quality. A hired firm can run a building well and an owner can run one badly, or the reverse. The difference is structural: who holds the relationship with residents, who decides when to spend on repairs, and how many parties stand between a problem and its fix.

What size decides

National data show how strongly property size predicts the choice. HUD and the Census Bureau reported from their 2021 rental property survey that about 22 percent of rental properties with one to four units were professionally managed.² For properties with 150 or more units, the professionally managed share was 84 percent.² Put the other way, close to four in five small properties had no professional in charge, while at the large end fewer than one in six lacked one. Among big buildings the owner who manages is rarer still. Harvard Joint Center figures published in June 2026, covering properties of 50 or more units, put owner managed buildings at only 5 percent of properties and 3 percent of units.⁵

Ownership follows the same slope. Roughly seven in ten rental properties nationally belonged to individuals, but two thirds of the properties with at least 150 units belonged to LLCs or partnerships.² An individual with a house or a small building can often do the work alone or with a handyman. A company holding hundreds of units needs staff, systems and supervision, and it either builds them or buys them from a firm. The owner operator model entry follows the small end of this slope in more detail.

The fee manager’s case

The federal handbook on property managers gives the plainest reason owners hire out. Owners who lack the time or expertise for daily management often hire a property or real estate manager, employed either directly by the owner or indirectly through a contract with a property management firm.³ A firm brings trained people, a licensing base where the state requires one, and routines built across many properties. In most states a property manager must hold a license, so a licensed firm brings that credential with it.³

A fee manager also carries costs that are not only the fee. The firm works for many owners at once, and each may want different tools and reports. When the National Multifamily Housing Council and RealFoundations surveyed apartment companies about technology in 2023, a respondent that manages only for others called the pile of client specific apps it must bring on board a heavy burden.⁴ Pure fee managers also trailed the other two company types in letting prospects book their own tours.⁴ A firm serving many clients may simply move more slowly on choices that each client must approve. The pure fee model operates at great scale all the same: Multi Housing News placed two third party companies, Avenue5 Residential and Apartment Management Consultants, fourth and fifth in its 2026 ranking, each with more than 150,000 units.⁶

The self manager’s case

Self management keeps the owner close to the property. The handbook’s description of the onsite manager doubles as a list of what a self managing owner takes on: routine inspection of grounds, facilities and equipment, meetings with residents about repair requests and problems, showing vacant units, enforcing the lease, and keeping records of income and spending.³ It also warns that the work can call for handling emergencies outside normal hours.³ An owner who manages accepts those nights and weekends as part of holding the property.

In return, the owner controls every decision that touches a resident, from the timing of a preventive maintenance visit to the tone of a renewal letter. There is no contract term to negotiate and no gap between the goals of the owner and the goals of the manager, because they are the same person or company. The handbook’s figures hint at how common working for oneself is in the occupation: nearly a third of its workers, 31 percent, were self employed.³

Software is shifting the balance. According to the handbook, software that lists empty units and routes repair tickets may hold down hiring of managers.³ The same tools shrink the paperwork a small owner would otherwise hand to a firm. The occupation’s wider profile is under property management.

Mixed arrangements

Many large owners do both. Among the 40 companies in the NMHC technology survey, a hybrid group making up 22 percent held property yet relied on outside managers for part of it, next to 58 percent running everything they held and 20 percent holding nothing and managing for clients.⁴ A hybrid owner might run the buildings in its home market with its own staff and hire a local firm for a building in a distant city, or keep management in house for one product type and contract it out for another. At the very top the two roles diverge sharply. Multifamily Dive reported in April 2026 that Greystar ran 1,014,091 apartments as of January 1 and held title to 119,160.⁷ At the smallest end, self management is often personal: an advocate for small New York owners told The Bronx Times in May 2025 that such owners often find tenants by word of mouth and take particular care choosing them when they live on the property.⁸ The vertical integration entry shows how often the country’s top owners also appear among its top managers.

Whatever the arrangement, the surveyed companies named the same targets for the coming year to year and a half: daily life in the building, which the report calls the resident experience, and the renewal decision.⁴ The choice between self management and fee management settles who does the work; it does not change what residents expect of it.