Julie Ziemelis, a Silicon Valley real estate industry public relations and marketing expert, along with her husband Eric, a furniture designer, managed rental properties in Los Gatos and Sunnyvale -- until they decided on a job-related stint in Hawaii.

The hope now is that they can concentrate on the venture and leave the property managing to the professionals.

John M. Jenello, a San Jose, California, CPA, is a nice guy who too often fell for the personal stories of doe-eyed prospective tenants seeking to rent his single-family home rental property.

He also can't find the time to keep up with current market rents to better set his rents and when a tenant became a problem he really lost control.

"The bottom line is that for the fee they charge, a good property manager allows you to not worry at all about your rental properties," said Jenello.

The second home boom has come with a growing number of buyers who buy or turn properties into rentals, full or part time, and seek to maximize their cash flow by cutting out the middle man and acting as their own property manager.

Investment property owners everywhere successfully manage their own properties, make a profit, find good tenants and, when a tenant goes bad, they know how to take off the kid gloves. Generally, those do-it-yourself property managers rent out a single or two properties, have some business management background, are quick studies and tend to be lucky -- or are endowed with a high level of grit.

They need all those traits because in the time it takes to buy an investment property and put it up for rent a do-it-yourself property manager must know or learn what it takes a professional property manager years to master.

Doing it yourself to save the 6 percent to 10 percent (of the rent) property management commission for conventional long-term rental properties or the even greater 30 percent to 50 percent or more property management fees on resort and vacation area rentals (which rent more like motels or hotels), can end up costing you more than you save if you don't know what you are doing.

There's a lot to learn from existing do-it-yourself property managers who most often turn and run for help when they get what they think is a good tenant who goes bad.

"It's usually to the point they need to get the tenant out and don't know how to get them out and just out of sheer frustration they hire a property manager," said Sandy Adams, Associates Property Management, in San Jose.

"People behave on an emotional level and approve tenants who seem like nice people. One client said the tenant hadn't paid since she moved in and when we checked their application the information didn't jibe and we discovered the tenant was a professional at this sort of thing," said Adams, an industry spokeswoman and president of the Silicon Valley chapter to the National Association of Residential Property Mangers (NARPM).

Adams says tenants prey upon property owners who aren't trade professionals because they know most of them don't have access to all the background checking services -- credit and rental history and notices of eviction, etc. -- professional mangers do.

In California, professional property managers are licensed by the Department of Real Estate as real estate brokers or as a property manager working under a licensed property management broker, just as real estate sales people are licensed to work under licensed brokers. Like other professional licenses, the shingle comes with initial and continuing education requirements.

Licensed professionals also should be insured against liability to keep your liability risk at a minimum. Many of them are also affiliated with trade groups like NARPM and local apartment associations and other trade groups that offer ethical and fiduciary guidelines, continuing education programs and related services as well as legal rental applications, contracts and disclosure forms among other tools for professionals.

"Yes, of course, someone could manage their own property. First, they should be a member of an apartment or rental association, like Tri-County Apartment Association (in San Jose). Not only will this give them the resources they need for vendors and forms, but also for education and market information. Second, they should live in close proximity to the property," said Adams.

In addition to thoroughly screening tenants, property managers have at their beck and call vendors and working relationships with other professionals to help them quickly perform a host of maintenance, repair and upkeep chores.

"You can also use the analogy of stock investing. Many investors use a full service broker because the experts are better at managing the investments than are the

investors. And in the long run, the investor makes more money even though the have to pay the fees," said Terry Feinberg, vice president of the Arizona Multihousing Association in Phoenix, a popular second home market, especially for California's second home buyers.

Such a professional comes in handy when liability issues arise.

The rental industry is heavily regulated by local, state and federal law, including lead-based paint and asbestos disclosures, eviction and pay-or-quit laws, security deposits and fair housing rules. The laws give both tenants and landlords rights, but with those rights come responsibilities. Responsibilities ignored are lawsuits waiting to be filed.

"The average investor isn't going to know all the laws they must comply with. Failure to comply can be very expensive, even when found innocent, due to the expense of legal discovery and defense. A fair housing investigation can easily cost $25,000 and that's just for defense, let alone if somebody is found guilty and has to pay penalties. Some fair housing violations come from little nuances," said Feinberg.

"We recently had a member settle for $5,000 plus their own attorney costs because a manager told an accessible housing tester that they could replace the exterior door to an apartment at their expense, but they might have to return it to its original condition when they moved. There is a little known exclusion in the Fair Housing Act to the "return it to its original condition" provision. It does not apply to entry doors," Feinberg explained.

The Ziemelises don't want to find out the hard way that distance between the property owner's home and the investment property often dictates putting a professional property manager in place.

"Physically, if you live here and buy a property in Arizona, it's almost impossible to manage it from long distance. How do you show it when it's vacant if you have a job? Especially if it's a vacation rental. Property mangers in the area would cost a lot less to handle repairs, maintenance, showing the property than your cost in travel," said Louis Melo, president and broker of Atlantis Properties in Los Gatos, CA.

Even self-taught Florida real estate investor Christine Hrib Karpinski, author of "How to Rent Vacation Properties byOwner: The Complete Guide to Buy, Manage, Furnish, Rent, Maintain and Advertise Your Vacation Rental Investment" (Kinney Pollack Press, $26), who is an avowed "rent-by-owner advocate" says she can "appreciate circumstances and preferences that make working with a property management company the best choice for you," in her latest book "Profit From Your Vacation Home Dream" (Dearborn, $19.95).

Devoting a chapter to the subject, Karpinski concedes, "Many investors buy vacation homes strictly for the appreciation they'll realize over time. They're often busy professionals who live far away from their second homes and have no interest in fielding calls for bookings or maintenance issues."

Published: July 15, 2005

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.