6 Advantages to Hiring a Property Manager (& Why I Wish I Did Sooner)

6 Advantages to Hiring a Property Manager (& Why I Wish I Did Sooner)

5 min read
Dave Van Horn

Dave Van Horn is a veteran real estate investor and CEO of PPR Note Co., a $150MM+ company managing funds that buy, sell, and hold residential mortgages nationwide. Dave’s expertise is derived from over 30 years of residential and commercial real estate experience as a licensed Realtor, real estate investor, and private lender.

Experience
Beginning his career in construction and as a Realtor, Dave bought his first investment property in 1989. After years of managing his own construction business, Dave became a full-time real estate investor, specializing in fix and flips, buy and holds, and eventually commercial projects, before moving into note investing in 2007.

Over the past decade, Dave has also invested his time into becoming a connector and educator, who helps others achieve success. He focuses jointly on helping accredited investors build and preserve wealth with his group Strategic Investor Alliance and with general audiences through the annual MidAtlantic Real Estate Investor Summit.

Dave has also shared his strategies and experiences with real estate and note investing via hundreds of articles published on the BiggerPockets Blog and with his acclaimed book Real Estate Note Investing.

Press
Dave has been featured on the BiggerPockets Podcast twice (shows 28 and 273), as well as episodes of familiar podcasts, including Joe Fairless’ Best Ever Show, Invest Like a Boss, Cashflow Ninja, and many others. He also has been a guest of Herb Cohen’s on Executive Leaders Radio, which airs nationwide.

Accreditations
Dave is a licensed Realtor with eXp Realty with CRS and GRI designations.

Follow
Dave’s LinkedIn
PPR on LinkedIn
PPR on Facebook
Twitter @DAVIDAVANHORN

Read More

Join BiggerPockets (for free!) and get access to real estate investing tips, market updates, and exclusive email content.

Sign in Already a member?

The hardest job to hire for is something you used to do. For me, as a real estate investor, there were two jobs that were hardest to give up.

One job that was hard to hire out was painting, as I had been a painter myself for 13 years before becoming a contractor for another 10 years. Of course, there’s nothing wrong with working in a trade, but after hurting my back and then entering the world of real estate and note investing, it no longer made sense for me.

The second job I was slow to hire out was property management. In the end, however, I didn’t have much of a choice. I had been a property manager at a ReMax, and we merged with another real estate office that already had a rental department. As a result, they no longer allowed their regular agents to do property management.

After these rules changed in my real estate office, I had to find a property management company for my clients, who were typically investors with multiple properties. I also had to find a property manager for my own rentals, since at this point, I no longer had enough time to do it myself (especially after entering the note business).

Luckily, I knew a couple who had gone into the property management space several years before, and they were managing a lot of units at this point. Plus, I knew the wife from when I first started in the business, and she had a very good reputation. On top of being a real estate broker, she was also a district justice, which is someone who oversees landlord/tenant complaints at the local court level.

RELATED: What Does a Property Manager Do? Here’s the Job Description

Besides the long track record and the fact she was politically connected, there were many other benefits I quickly enjoyed upon hiring them.

6 Advantages of Hiring a Property Manager

1. They are affordable.

In fact, they’re much more affordable than I originally thought. When I factor in all the things they do and the time they save me, it’s well worth outsourcing.

refinance

Related: How to Spot a Great (Not Just Good) Property Manager

2. They offer great on-call service.

They have a 24-hour emergency service that covers things like heating, plumbing, or electrical issues. Today, I travel a lot, and this service is invaluable to me. I can still use my contractors if I want to, but sometimes it’s easier just to let them handle most of the little repairs.

Plus, they maintain great records. The beauty of using their service is that they track everything from the rents to the repairs, and they even write the checks to cover expenses like utilities and contractors. It’s great to get a nice year-end package that I can just hand over to my accountant.

3. They represent me in court.

Today, I’m a really busy guy. I can focus my time on running my business or doing the things I’m best at, and they can fill in for me on those unfortunate cases that require a court appearance.

4. They’re compliant.

I especially appreciate their emphasis on compliance when it comes to drawing up leases and screening tenants. I love that they screen for things like credit history, criminal background, evictions, and even Meghan’s Law (history of sex offenses). They also stay up to date on licensing requirements, local ordinances, and state laws and regulations.

professional young asian female architect wearing casual shirt sitting in cozy office and making architectural sketches. Profession concept. beautiful young girl interior designer drawing blueprint.

5. They handle my showings.

Not only do they show properties to prospective tenants until they’re rented, but they also meet various HUD and township inspectors for yearly rental licenses. This is another area where the property manager saves me a lot of time and aggravation.

Plus, if you own multiple properties, see if you can leverage your total book of business to negotiate a better set of terms with the property manager.

Of course, you should consider any disadvantages, too, before outsourcing property management.

Disadvantages of Hiring a Property Manager

When it comes to disadvantages of hiring a property manager, I can really only think of two: cost and control.

  1. For many real estate investors, the biggest deterrent from hiring a property manager is probably the cost, which definitely cuts into your monthly cash flow. So if you have the time and the skills, and it’s more lucrative for you than other tasks, it may make sense to manage your own units.
  2. Another disadvantage could be that once you hire a property manager, you’re not in control of everything anymore. Maybe you’re not as dialed-in when it comes to the maintenance and condition of your properties or the choosing of your tenants, especially as you start to rely more and more on the management company. Whether you can accept that is a personal decision, as well as a business decision.

Related: 10 Tasks a Property Manager Will Take Off Your Plate (to Free Up Precious Time!)

Starting Over, What Would I Do?

Considering both the advantages I experienced and the potential disadvantages of hiring a property manager, would I make the decision to hire a property manager again?

My answer is a resounding yes.

If you don’t outsource the job, in a sense, you’re just hiring yourself. Looking back, I think it was a valuable experience doing it myself at first, as it actually taught me how to manage a property manager, as well as what to look for when hiring one.

Knowing how much time and effort is required to effectively manage my units today, the only thing I would have done differently is turn my units over to a management company sooner.

My biggest reasons for outsourcing property management are that it allows focus on what I do best (raising private equity and running a company) and that it gives me peace of mind. The focus thing is a really big deal, especially since I love what I do, I’m good at it, and it’s lucrative.

So, if you make your money finding deals, flipping deals, or fixing deals, then go do that. Unless property management is your core business, focus on the stuff you do best, and stop trying to save money in the wrong (time-consuming) areas.

Peace of mind has also been more and more important to me and my family as we approach retirement. When I was young (and not so smart), I tried to do everything. But guess what—you can’t take it all with you, right? Heaven forbid something were to happen to me unexpectedly, I don’t want my family having to deal with the property management and maintenance issues.

Having this all set up in advance with good people, systems, and processes helps me sleep better knowing I did the best I could for them.

So, personally, my only regret is that I didn’t hire a property manager sooner. But I realize this isn’t the case for everyone.

blog ads 01

Do you still manage your own units and do your own maintenance, or do you outsource one or both? What are your reasons?

Leave your thoughts below!