House hacking with a property manager

9 Replies

I am interested in your guys' opinion of still using a property management company while house hacking in a 2-4 unit MF. The biggest reason behind this is getting the 2AM knock on the door because your residents' toilet is clogged or something of that sort... I believe that using a property manager is duable as long as the numbers work, or at least saves me money by not throwing it away on rent. I would prefer not having to deal directly with a tenant(s). 

The reason I ask is because I hope to buy a duplex and live in it the minimum amount a FHA loan requires (typically 1 year???). After that time is up I would move out and rent out both units and begin to cashflow if the property wasn't doing so already. Obviously before buying I would make sure the property would Cashflow after I moved out.

Let me hear your thoughts!

Hi Kyle,

A lot of people I've worked with definitely prefer using a property manager as long as the manager could guarantee what you'd expect to be netting. Self-managing can be extremely time-consuming, and having someone to oversee and pay for maintenance, cleaning, occupancy taxes, etc. is always a good thing (so long as a promising yearly income could be guaranteed with a PM). 

My company actually just launched a calculator to help investors see what a guaranteed rental income offer could look like. Feel free to check it out. I'd love any feedback! http://content.vacationfutures.com/income-calculator

Best of luck! 

Monika

The 2 am phone call or door knock is that extremely rare event everyone seems to quote.  I think I may have been awoken once in my 13 years of self-managing.  It was a domestic dispute I think.  Wasn't even the toilet!

If you don't want to 'deal with tenants' that's ok.  Just know the costs of a PM far far exceed the 8-10% of gross rents.  When you start receiving the repair bills from professional plumbers and electricians getting called out for simple stuff, you'll see what I mean.  Just so you're aware!  

It does not make any sense to have a PM when you are in the building.  I am sure this person who was going to knock on your door at 2:00 Am when you don't have a PM will still knock on your door even if you have a property  manager.  

As the other BP person said it is extremely rare to have someone knock on your door at 2:00 Am in the first place.

If it was my building and someone was having a flood I would want them to knock on my door because it's my property being flooded.  

I more so used the 2 AM knock as an example, that is true, it is probably pretty rare. The convenience/ time saving factor is what draws me to using property management. I am definitely considering self managing as well though. If I were to use PM then I would be sure the residents do not know. If they did know, it would pretty much defeat the purpose of using PM.

Originally posted by @Barbara G. :

It does not make any sense to have a PM when you are in the building.  I am sure this person who was going to knock on your door at 2:00 Am when you don't have a PM will still knock on your door even if you have a property  manager.  

As the other BP person said it is extremely rare to have someone knock on your door at 2:00 Am in the first place.

If it was my building and someone was having a flood I would want them to knock on my door because it's my property being flooded.  

 I'm more concerned about the 2 pm knock on my door. I work at night and sleep in the day. I also am out of town weeks at a time for work. My workdays are 10 to 12 hours long. 

I'm sure self managing is easy for someone who works Mon-Fri 9 to 5, sitting in an office. I work outdoors, in places so rural that there isnt cell service.

Originally posted by @Kyle Soderman :

I more so used the 2 AM knock as an example, that is true, it is probably pretty rare. The convenience/ time saving factor is what draws me to using property management. I am definitely considering self managing as well though. If I were to use PM then I would be sure the residents do not know. If they did know, it would pretty much defeat the purpose of using PM.

 I not only wanted the convenience, but the contractors they have at their disposal, the experience they have in dealing with tenants, the systems they have set up to handle everything from repairs to vacancies and evictions. I also knew that my job was too demanding to be able to give real estate 100% of my attention. In the future as I get larger, that may change, but for now it is a necessity. 

Also there are some who think having a PM means not doing anything. Well I disagree. Your job is to manage you manager. Call them and talk to them often. Make sure they are doing their job. Read all of the financials and question them on anything that is questionable.  If necessary, fire them. Overall I have had a positive experience with my PMs. 

Many people have been burned, so be careful. I see it the same as when you are working with a contractor for a flip. A lot of contractors suck, but some are very good.

My ultimate goal was never to be a property manager or start a property management business. I realize that for some people, that is what they want, but for me, I want something different.

Originally posted by @Barbara G. :

I guess you don't have a question.  It sounds like you are saying you wlll not be available.  No cell phone availability WOW

 I won't be available. At best they could leave me a voice mail and I could get back to them in 10 hours. That is the nature of my job. Long and awkward hours in remote locations. Last summer I spent nearly 2 months 800 miles away in Texas for work.