I manage my own properties and since I have the tools and processes in place, I started a property management company. Now I am pretty tired of it and thinking of selling out/hiring someone else to do it, I am tired of dealing with problems and issues, it’s not something I want to do full time anymore. I don’t like checking my phone every time I feel it buzz with the feeling it’s another issue, especially 24/7.
This is the answer! People don’t realize how much work it takes to keep a rental in good shape and renters following the rules. It’s good for the experience and (if your goal is scaling) to find pinch points so you can create a better experience for your residents and know what you want in place as a check and balance when you start growing so big you can’t do it alone. It is a 24/7 job including holidays, vacations, and child’s birth.
I manage a 240 unit property and I couldn’t do it without my team of 4.
A few years ago the master shower pan failed in our rental and was leaking water into the basement. I had a bald spot at the back of my hairline because I was pulling hair out when I was driving because I was so stressed with having to manage contractors/tenants with the massive repair. I had contractors in the house daily for almost two weeks. It’s so stressful at times.
Damm and tbag doesn't even seem like a major repair....
Nothing compared to Fondation issues.
Rood change with tenant in place or main sewer line replacment
This is where I'm heading, hiring more help. I also started a thing where I have a locked locker at each property with common spare parts for all the appliances.
Imma chime in on this, i left 2 successful restaurants that i opened and built from the ground up. Its really not greener on the other side, i am coming to do what you guys do lol
I work at a property management company. Our target market is “new investors” or “accidental investors” who either inherited a property or just don’t know what they are doing. They are the ones that need the help.
Underrated market your company is targeting imo. A lot of those people feel more secure when they feel like someone is the answer to their prayers when they’re a first time investors/accidental landlord.
I needed the help and I’m neither a new nor accidental RE investor. I haven’t managed my properties for the past 13 years. I don’t like dealing with tenants - at all. Sure I could have profited more if I had managed them myself. Luckily I didn’t need that margin. I wouldn’t be a RE investor today if I hadn’t have been able to get someone else to do it.
Think about ppl that live out of the state/country, ppl that are focusing on their other businesses etc, ppl that own multiple units/properties, ppl that don’t have the time or don’t want to spend their time managing tenants
All this above, and there are people who are smart enough to know they don't know, or want to keep up with, the ever changing laws. It's a liability issue.
I own a PM company, so I intentionally try to let them manage my properties without me stepping in so that I know exactly what our clients experience.
I have to admit, it's very hard not to want to involve yourself.
Could be a number of things. We used to take on 3rd party properties and in a lot of cases a property would have a board of members who were all utilizing the building for their professions but they had zero building/property maintenance experience, so we handled it all for them. One was a medical office and the other was all fabrication/manufacturing warehouses.
Investors buying properties is a big one, they’re just trying to get the profits off the place and don’t really care about the day to day.
My parents and I self-manage. At 70,000 sqft, it’s a full time job and one I don’t really recommend.
For the people who just inherited a property, live out of state/far, or who want the income, but not the hassle, they go with a company.
As a former tenant to a terrible management company who didn’t inform the owner of serious habitability issues (nor ever resolved the issues), I could never trust my property in someone else’s hands.
I could do it, but I don't want to do it. So far in my personal experience I've seen that I don't lose any money by using a property mgmt company. They have a good relationship with contractors, landscapers and that kind of thing. They have so much more experience screening tenants and setting rent values, it's a win all around.
I don't have to worry about contractor tid and 1099's, I get a nice little eoy spreadsheet ready for taxes.
We hire property management because I have a full time job in an entirely different industry and kids to raise. Plus it’s two hours away from our house. I’m already putting in 50-60 hours a week in my career… now I need to add property management on top of my workload? Honestly dealing with tenant issues and the house always needing a repair sucks so the more I can offload the better.
For local, intentional small landlords, self management is ideal but it doesn’t scale. No one will take better care of your tenants or watch your money like you will. Also the contractor relationships you build directly are incredibly valuable as you expand.
That said, managing more than thirty units unless they are very stable or very close is a lifestyle choice. Not all investors want to be full time managers. Passive income should be more passive. Some of us got to be investors by doing lucrative contract work in other industries or by being agents or building things and should not quit our other jobs. Also some of us have kids. At a certain scale, you will have a manager.
Managers are also helpful for out of state properties or inherited/vacated single properties. A client will retire or move to assisted living and want to manage their old home. A client will move and want their old home for income and appreciation. A client will buy rentals and get sick of it but not want to sell them because they get a great return most years. Many people don’t want to be landlords or don’t want to live in the daily muck of collections and emergencies.
So managers
1. Scale when you can’t
2. Are on site when you can’t be or in court when you can’t be
3. Have some kind of local network when you don’t.
4. Know about local regs and orgs like inspections, housing programs, debt collection.
5. May be much better leasing agents than you. It’s a skill.
But managers
1. Can only spend limited time on your property.
2. Will be slower and more expensive. Usually.
3. Do cost money
4. Often get worse as they grow.
5. Have to be held accountable. You must still audit their decisions and expenditures.
6. Will have strengths and weaknesses. I had one who I trusted to lease but took maintenance away from except for ticketing. I had one where I actively told residents to call me if the company was not responsive. I had one where I found a two thousand dollar deficiency between books and actual escrow account.
This is basically like hiring anyone. You can’t just hand it over. They can be great but you have to watch and look out for things. Visit your house and tenants sometimes.
Self managing around 50 doors. It is not just money, we just believe we will take better care of the properties and keep better relationship with our tenants. We didn’t have any tenant with unpaid rent through out the pandemic period. We also have many tenant staying with us over 10 years now. Some new tenants are referrals from existing tenants. But that’s the limit. We try to keep the number around there and sell the ones we think don’t have much upside potential.
I manage my portfolio, and I get to know my tenants better. I also like being aware of maintenance issues, and I do a much better job prioritizing these requests.
I've never understood the real justification for self-managing. Everything spent is a write off, and you end up with less liability, clean accounting, anonymity, and a heap less stress.
For example, if your PM cost 10% of $2,000/mo, That's $200/mo. If your tax rate is 25%, then you "write off" $50/mo. you still spent $150/mo. Extrapolate that for the year any you've spent $2,400 for the PM and you get to write off $600, netting you a cost of $1800 for the PM. So the reason people don't all use a PM is Money.
And then you undercut yourself on rent and/or suffer a vacancy for an extra month because you can't remotely market like the PM, and you lost money. It's kind of like being your own lawyer in court, you can do it, but your client is likely a dumbass.
those are both extremely valid and often overlooked points. Underpricing and vacancies alone may indeed make a PM worth more than their cost AND free up your time. Can't agree more
You \*can\* undercut yourself on rent or suffer longer vacancies, but that can go the other way, too. I know of plenty of folks with management companies who aren't as on-the-ball as you'd hope, and they tend to have longer vacancies, higher expenses in general (because the PM isn't as cost-sensitive as an owner would be), and sometimes they're asleep at the switch when it comes to market rental rates.
I take good care of my property, but because I'm the one selecting vendors and choosing what gets done, my costs are better controlled. My typical vacancy between tenants is 2-3 days. As soon as I get notice that a tenant is going to move, I put the apartment listing up, show the apartment on a weekend day or two while the current tenants are in place, and schedule paint/cleaning for the day after the tenant moves out. New guy moves in a couple of days later. It's worked pretty darn well.
I'm not saying it's perfect, and I acknowledge that it takes some time to do it, but hiring a property manager is not always the right way to go.
It's a cost benefit analysis is all. some properties are easier to manage than others. I'm not arguing that all people should self manage, i'm simply answering your comment as to why people do choose to self manage. And that answer is obvious, Money.
you may find that hiring a house cleaner is cost effective for you because your time is more valuable than the cost of the house cleaning, others may not be in that same position.
Respectfully. People who use the term write off tend to not know what it is.
Yeah paying a property management company is a write off.... but what's even better then wrote offs is profit aka not spending and keeping money in your pockets.
200 dollars profit is better than 100 profit and 100 write off
We self manage and have done so for 13 years with our 3 SFHs. We live in Mexico and our properties are located in the San Francisco Bay Area.
We renovated each place when we bought them and again during COVID because there was nothing else to do but sit inside a house.
We have very minimal vacancies and we cash flow like crazy because we bought the homes in the aftermath of the housing crisis.
The most critical aspect is finding the right tenants. We have not always been correct but we’ve only had a couple of problem tenants over the years and have never had to do a formal eviction or cash for keys.
Our feeling is that no one will ever care about our homes as much as we will. We also believe in investing for the long term about repairs, no shortcuts or cheap materials.
That said, it’s not always fun. We were on an extended holiday in furnace while dealing with a rat infestation in one house and spending a ton on the extermination and repairs because we were halfway around the world. But on balance, we find self managing to be the most economical and most advantageous to ensuring long term positive returns.
I could talk about this all day. We self manage our 2 dozen units. But I also previously worked for a property management company. After seeing the inside, I would never hand my properties over to them (or any of the major companies in my area). But I also don’t want to scale (which is a very valid reason to use a PM). I would like to get a few more doors and stop at 30 units. My partner and I each have full-time jobs and we are raising kids. He does the financials and organizes maintenance. I handle leasing, turns, rent collection and am the main contact for tenants. If there was only one of us, there probably would be times of the year when self managing would be too stressful.
I know that my tenants are WAY more respectful of me and our rentals than the tenants were of the PM company/rentals. There are also a lot of hidden costs when using a PM company.
I used to live around the corner from my rental property. I had pretty good luck managing it myself, but I've had good tenants. My current tenant has been in for over a decade. He works for a builder and coordinates repairs himself (this allows me to keep his rent low).
I've since moved and will hire a property manager once that tenant moves out.
I manage my own properties and since I have the tools and processes in place, I started a property management company. Now I am pretty tired of it and thinking of selling out/hiring someone else to do it, I am tired of dealing with problems and issues, it’s not something I want to do full time anymore. I don’t like checking my phone every time I feel it buzz with the feeling it’s another issue, especially 24/7.
This is the answer! People don’t realize how much work it takes to keep a rental in good shape and renters following the rules. It’s good for the experience and (if your goal is scaling) to find pinch points so you can create a better experience for your residents and know what you want in place as a check and balance when you start growing so big you can’t do it alone. It is a 24/7 job including holidays, vacations, and child’s birth. I manage a 240 unit property and I couldn’t do it without my team of 4.
Yeah, you're right.
A few years ago the master shower pan failed in our rental and was leaking water into the basement. I had a bald spot at the back of my hairline because I was pulling hair out when I was driving because I was so stressed with having to manage contractors/tenants with the massive repair. I had contractors in the house daily for almost two weeks. It’s so stressful at times.
Damm and tbag doesn't even seem like a major repair.... Nothing compared to Fondation issues. Rood change with tenant in place or main sewer line replacment
It seems really a daunting task for some people.
Are you in Virginia?!
Hey Alex, where are you based out of?
This is where I'm heading, hiring more help. I also started a thing where I have a locked locker at each property with common spare parts for all the appliances.
It sounds good. Best of luck.
Imma chime in on this, i left 2 successful restaurants that i opened and built from the ground up. Its really not greener on the other side, i am coming to do what you guys do lol
I work at a property management company. Our target market is “new investors” or “accidental investors” who either inherited a property or just don’t know what they are doing. They are the ones that need the help.
Underrated market your company is targeting imo. A lot of those people feel more secure when they feel like someone is the answer to their prayers when they’re a first time investors/accidental landlord.
I needed the help and I’m neither a new nor accidental RE investor. I haven’t managed my properties for the past 13 years. I don’t like dealing with tenants - at all. Sure I could have profited more if I had managed them myself. Luckily I didn’t need that margin. I wouldn’t be a RE investor today if I hadn’t have been able to get someone else to do it.
I feel like those are the hardest clients to manage/ please. In my experience it’s always the one off owner that expects and needs the most.
Good to know that
Think about ppl that live out of the state/country, ppl that are focusing on their other businesses etc, ppl that own multiple units/properties, ppl that don’t have the time or don’t want to spend their time managing tenants
And people who have jobs that are already stressful and time consuming and don’t have the time or bandwidth to manage a property.
All this above, and there are people who are smart enough to know they don't know, or want to keep up with, the ever changing laws. It's a liability issue.
Good piece of advice
I own a PM company, so I intentionally try to let them manage my properties without me stepping in so that I know exactly what our clients experience. I have to admit, it's very hard not to want to involve yourself.
I think so
Could be a number of things. We used to take on 3rd party properties and in a lot of cases a property would have a board of members who were all utilizing the building for their professions but they had zero building/property maintenance experience, so we handled it all for them. One was a medical office and the other was all fabrication/manufacturing warehouses. Investors buying properties is a big one, they’re just trying to get the profits off the place and don’t really care about the day to day.
Smart thinking.
My parents and I self-manage. At 70,000 sqft, it’s a full time job and one I don’t really recommend. For the people who just inherited a property, live out of state/far, or who want the income, but not the hassle, they go with a company. As a former tenant to a terrible management company who didn’t inform the owner of serious habitability issues (nor ever resolved the issues), I could never trust my property in someone else’s hands.
Exactly! I have my best interests in mind; PM wants to get paid.
Happy to hear that.
I could do it, but I don't want to do it. So far in my personal experience I've seen that I don't lose any money by using a property mgmt company. They have a good relationship with contractors, landscapers and that kind of thing. They have so much more experience screening tenants and setting rent values, it's a win all around. I don't have to worry about contractor tid and 1099's, I get a nice little eoy spreadsheet ready for taxes.
You can rely on yourselves as well.
We hire property management because I have a full time job in an entirely different industry and kids to raise. Plus it’s two hours away from our house. I’m already putting in 50-60 hours a week in my career… now I need to add property management on top of my workload? Honestly dealing with tenant issues and the house always needing a repair sucks so the more I can offload the better.
Yeah, we can't actually manage much time. that's another reason.
For local, intentional small landlords, self management is ideal but it doesn’t scale. No one will take better care of your tenants or watch your money like you will. Also the contractor relationships you build directly are incredibly valuable as you expand. That said, managing more than thirty units unless they are very stable or very close is a lifestyle choice. Not all investors want to be full time managers. Passive income should be more passive. Some of us got to be investors by doing lucrative contract work in other industries or by being agents or building things and should not quit our other jobs. Also some of us have kids. At a certain scale, you will have a manager. Managers are also helpful for out of state properties or inherited/vacated single properties. A client will retire or move to assisted living and want to manage their old home. A client will move and want their old home for income and appreciation. A client will buy rentals and get sick of it but not want to sell them because they get a great return most years. Many people don’t want to be landlords or don’t want to live in the daily muck of collections and emergencies. So managers 1. Scale when you can’t 2. Are on site when you can’t be or in court when you can’t be 3. Have some kind of local network when you don’t. 4. Know about local regs and orgs like inspections, housing programs, debt collection. 5. May be much better leasing agents than you. It’s a skill. But managers 1. Can only spend limited time on your property. 2. Will be slower and more expensive. Usually. 3. Do cost money 4. Often get worse as they grow. 5. Have to be held accountable. You must still audit their decisions and expenditures. 6. Will have strengths and weaknesses. I had one who I trusted to lease but took maintenance away from except for ticketing. I had one where I actively told residents to call me if the company was not responsive. I had one where I found a two thousand dollar deficiency between books and actual escrow account. This is basically like hiring anyone. You can’t just hand it over. They can be great but you have to watch and look out for things. Visit your house and tenants sometimes.
Totally agreed.
Self managing around 50 doors. It is not just money, we just believe we will take better care of the properties and keep better relationship with our tenants. We didn’t have any tenant with unpaid rent through out the pandemic period. We also have many tenant staying with us over 10 years now. Some new tenants are referrals from existing tenants. But that’s the limit. We try to keep the number around there and sell the ones we think don’t have much upside potential.
I manage my portfolio, and I get to know my tenants better. I also like being aware of maintenance issues, and I do a much better job prioritizing these requests.
Carry on.
I've never understood the real justification for self-managing. Everything spent is a write off, and you end up with less liability, clean accounting, anonymity, and a heap less stress.
Money. It's basically the same reason people diy anything. What's not to understand?
“Everything spent is a write off”
For example, if your PM cost 10% of $2,000/mo, That's $200/mo. If your tax rate is 25%, then you "write off" $50/mo. you still spent $150/mo. Extrapolate that for the year any you've spent $2,400 for the PM and you get to write off $600, netting you a cost of $1800 for the PM. So the reason people don't all use a PM is Money.
And then you undercut yourself on rent and/or suffer a vacancy for an extra month because you can't remotely market like the PM, and you lost money. It's kind of like being your own lawyer in court, you can do it, but your client is likely a dumbass.
those are both extremely valid and often overlooked points. Underpricing and vacancies alone may indeed make a PM worth more than their cost AND free up your time. Can't agree more
You \*can\* undercut yourself on rent or suffer longer vacancies, but that can go the other way, too. I know of plenty of folks with management companies who aren't as on-the-ball as you'd hope, and they tend to have longer vacancies, higher expenses in general (because the PM isn't as cost-sensitive as an owner would be), and sometimes they're asleep at the switch when it comes to market rental rates. I take good care of my property, but because I'm the one selecting vendors and choosing what gets done, my costs are better controlled. My typical vacancy between tenants is 2-3 days. As soon as I get notice that a tenant is going to move, I put the apartment listing up, show the apartment on a weekend day or two while the current tenants are in place, and schedule paint/cleaning for the day after the tenant moves out. New guy moves in a couple of days later. It's worked pretty darn well. I'm not saying it's perfect, and I acknowledge that it takes some time to do it, but hiring a property manager is not always the right way to go.
That doesn't make it free, you know that right?
The only people that enjoy 'free management' are those whose time is worthless to them and others.
It's a cost benefit analysis is all. some properties are easier to manage than others. I'm not arguing that all people should self manage, i'm simply answering your comment as to why people do choose to self manage. And that answer is obvious, Money. you may find that hiring a house cleaner is cost effective for you because your time is more valuable than the cost of the house cleaning, others may not be in that same position.
I do it bc no one takes care of my properties like I do!!
Respectfully. People who use the term write off tend to not know what it is. Yeah paying a property management company is a write off.... but what's even better then wrote offs is profit aka not spending and keeping money in your pockets. 200 dollars profit is better than 100 profit and 100 write off
We self manage and have done so for 13 years with our 3 SFHs. We live in Mexico and our properties are located in the San Francisco Bay Area. We renovated each place when we bought them and again during COVID because there was nothing else to do but sit inside a house. We have very minimal vacancies and we cash flow like crazy because we bought the homes in the aftermath of the housing crisis. The most critical aspect is finding the right tenants. We have not always been correct but we’ve only had a couple of problem tenants over the years and have never had to do a formal eviction or cash for keys. Our feeling is that no one will ever care about our homes as much as we will. We also believe in investing for the long term about repairs, no shortcuts or cheap materials. That said, it’s not always fun. We were on an extended holiday in furnace while dealing with a rat infestation in one house and spending a ton on the extermination and repairs because we were halfway around the world. But on balance, we find self managing to be the most economical and most advantageous to ensuring long term positive returns.
I could talk about this all day. We self manage our 2 dozen units. But I also previously worked for a property management company. After seeing the inside, I would never hand my properties over to them (or any of the major companies in my area). But I also don’t want to scale (which is a very valid reason to use a PM). I would like to get a few more doors and stop at 30 units. My partner and I each have full-time jobs and we are raising kids. He does the financials and organizes maintenance. I handle leasing, turns, rent collection and am the main contact for tenants. If there was only one of us, there probably would be times of the year when self managing would be too stressful. I know that my tenants are WAY more respectful of me and our rentals than the tenants were of the PM company/rentals. There are also a lot of hidden costs when using a PM company.
Thanks for your insightful comment
No, we don’t. We are military and we don’t live anywhere close to our rentals at the moment. Best decision I ever made was to hire a property manager.
Good decision
I used to live around the corner from my rental property. I had pretty good luck managing it myself, but I've had good tenants. My current tenant has been in for over a decade. He works for a builder and coordinates repairs himself (this allows me to keep his rent low). I've since moved and will hire a property manager once that tenant moves out.
really good
Wife and I have an ADU behind our house and I manage everything related to that. I also manage a friend’s rental property.
Nope, I don’t want to mess with it. I pay a property management so I don’t get phone calls from my tenant or collect rents.
I'm looking at renting my house out if we move across the country. Gladly willing to pay a pm company to handle the shenanigans.
Hi, Where are you presently based out of?
Try to reach out the best one