Experience Is the Ultimate Teacher<\/h2>\n
For me, I want the experience. And there is no experience like experience gained from actually doing something.<\/p>\n
In my day job as a law enforcement officer, I have items on my duty belt that are \u201cless lethal\u201d options for controlling a subject or subjects. Two of these are oleoresin capsicum pepper spray (OC for short) and a taser.<\/p>\n
OC is designed to incapacitate a subject when sprayed in the face and eyes by creating a burning sensation. Alternatively, a taser shoots two barbed projectiles into a subject\u2019s skin that are then electrified with 50,000 volts. This is designed to incapacitate major muscle groups.<\/p>\n
It is encouraged that you only carry these items if you have experienced the effects of their use. This purposefully happens during training, so that you can fully understand how each affects a person.<\/p>\n
I have been sprayed with OC and tased with a taser, and I can tell you that neither one is a pleasurable experience! I did not take someone\u2019s word about the effects of each, either; instead, I experienced those effects myself. By experiencing the effects<\/em> each creates, in my opinion, it has allowed me to better understand how and when to utilize the options.<\/p>\n For the new investor, it is my opinion that managing your own property is just as important as the effort you put into finding and analyzing that first deal<\/a>.<\/p>\n Prior to purchasing a property, I researched rental agreements<\/a> and located one that I could cannibalize much of and shape into something specific to my situation. This research alone caused me to look at dozens of rental agreements and glean information from many of them. I found numerous important items that I would never have thought about had I simply hired a property manager to manage my investment.<\/p>\n I obtained the lease from a local property management company. They had managed a property we purchased prior to our acquisition. I was disappointed with the quality of the lease this professional management company used. It had nothing in there about broken glass, excessive moisture, unlicensed vehicles, or doing mechanical work on vehicles. It didn’t indicate who pays for minor plumbing issues either, just to name a few things.<\/p>\n Related:<\/em><\/strong> My Biggest Property Management Nightmare<\/a><\/em><\/p>\n The management company’s lease would not protect my investment property in the manner I wanted to protect it. Had I not looked into rental agreements on my own, I would not have known this.<\/p>\n This is why I believe that, in order to be successful at anything\u2014I mean truly successful\u2014one must understand at least the basics. I am not saying one needs to be an expert in every facet of every aspect. But at a minimum, it is prudent to be able to recognize what is right from wrong.<\/p>\n As a new investor, when you are contemplating hiring a management company, ask yourself a few of the following questions:<\/p>\n Another common justification for not managing your own property is that \u201cyour time is too valuable\u201d (or some other similar statement).<\/p>\n I understand the concept that “time is money.” However, when viewed under the \u201ctotality of the circumstances\u201d concept (as in a law enforcement investigation), your time may be cheaper than you think.<\/p>\n What price do you put on education? Education, in part, is exactly what you are getting when you manage your own property.<\/p>\n I sometimes hear the argument that it is often cheaper to have a plumber respond to plunge a toilet than to do it yourself. My plumber would charge a service call plus a minimum rate to do that. My bill would likely be $60 for the service call, plus at least a half-hour or $40 labor, for a total of $100 to plunge or snake a toilet.<\/p>\n That is $100 that I could keep in my pocket for less than an hour\u2019s worth of time. Is it fun to go fix a clogged toilet? Absolutely not\u2014but it is part of the education.<\/p>\n Over time, I learned the real distinction between what to subcontract out to others and what to do myself. Don’t get me wrong… if you legitimately do not have the time or if a task is beyond your abilities, then yes, it is prudent to call a plumber, HVAC tech, or contractor. But let\u2019s face it, if you are not busy, you can save actual dollars, as well as \u201ceducate\u201d yourself.<\/p>\n Think of it this way the next time you hear the argument that your time is worth more. Imagine you go to your local convenience store, and they have a special: XYZ product for $1.25 each or two for $2.00. The concept is to get the customer to buy more because it is a perceived \u201cgood deal.\u201d<\/p>\n If you were planning to buy two of that product, then congratulations! You saved 50 cents. If you planned to only buy one and bought two because of the amazing sale, then you just lost 75 cents!<\/p>\n In other words, if you were not doing anything actually productive, you lost money by subbing out a property management issue. If you were busy working for $150 an hour and had to stop and plunge the toilet, then you lost $50.<\/p>\n Common sense goes a long way in figuring out what your time is worth!<\/p>\n Related:<\/em><\/strong> Professional Property Management vs. Self-Management: A Look at the Pros & Cons<\/a><\/em><\/p>\n A third common misconception is that the property management company employs professionals who know far better than you, the investor, about how to manage your investment. The reality is that those same property managers were not born with experience. They learned it\u2014just as you will!<\/p>\n Guess what? The property management company you hire is likely not going to go fix a clogged toilet, either. They are going to call a plumber\u2014the same thing you could have done.<\/p>\n As I stated earlier, I recently purchased property that was being managed by one of the \u201cpremier\u201d property management companies in my area. Yet, the property was not properly maintained and the upgrades were done by a contractor who was obviously the cheapest\u2014not one who was hired for the quality of work.<\/p>\n Face it, many management companies have dozens and dozens of properties per manager. How much time do you think they are going to devote to your property?<\/p>\n What’s more, often property managers know little to nothing about proper maintenance. They have no clue what is a good repair job or what isn’t. They either hire someone to fix the problem or have an on-staff maintenance person fix the issue.<\/p>\n Ultimately (as I have stated several times in my articles), there is no hard and fast rule for any one thing in real estate. Find a way that works for you, and move forward with it. Just make sure you understand the “why” and “what” of it.<\/p>\n At some point in my investing career, I hope to have enough properties that it is feasible to hire a company to manage my investments. I imagine it happening eventually, as I have recently obtained my real estate license<\/a> and am looking to build a portfolio of managed properties.<\/p>\n Remember, I am not advocating that you should always <\/em>manage your properties. What I am advocating is that, as a new investor, you should start out managing your own properties. Then, move on and move up as your experience dictates.<\/p>\n Once you understand how to manage a property, you will know what to look for in a property management company, <\/strong>which in turn will help protect your investment.<\/p>\n Ben Franklin said it best, \u201cAn investment in knowledge pays the best interest.\u201d<\/p>\n![\"closeup](\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2018\/06\/Rental-Property-Security.jpg\" "\\"\\"")
<\/p>\nArguments for Not Managing Your Investment Properties as a New Investor<\/h2>\n
Argument #1: Professional management is the best way to protect your investment.<\/h3>\n
Why This Logic Is Flawed<\/h3>\n
\n
![\"bright](\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/apartment-1-1078x516.jpg\" "\\"\\"")
<\/p>\nArgument #2: Your time is too valuable to spend on management tasks.<\/h3>\n
Why This Logic Is Flawed<\/h3>\n
![\"4](\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2018\/04\/Tax-Tips-for-Rental-Property-Owners.jpg\" "\\"\\"")
<\/p>\nArgument #3: Property management companies are run by professionals, who know how to do everything better than you.<\/h3>\n
Why This Logic Is Flawed<\/h3>\n
Disclaimer: New Investors, Read This!<\/h2>\n
![\"\"](\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/12\/manage-rental-property-book-ad.jpg\" "\\"\\"")
<\/a><\/p>\n