Property Management for just 1 Property?

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Property Management for just 1 Property?

Daniel Parrella
Indianapolis, IN 路 Member since 2018 路 21 posts 路 6 votes

So I'm THIS close to finally closing a deal!  Pretty excited to dive in and get going!

That being said, as I get closer I'm starting to think more about whether I should use a property management company or not.


Does anyone with some experience have any input on the things I could run into trying to manage it myself?  I'm prepared to take phone calls and coordinate handymen, etc, but I'm just starting to wonder if the time I'd invest would be worth it.  

Finally, if anyone has any good references for a property management company in the Cleveland Ohio area, I'd love to reach out to them and get prices/products.

Thanks as always!

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Brian Schmelzlen
Accountant 路 La Mesa, CA 路 Member since 2017 路 477 posts 路 476 votes
8y

I think the main value that you would find from a property manager (initially) is screening tenants.  However, there are tons of free resources on BiggerPockets and online in general that would help you screen tenants.

Unless you truly have no interest in doing it yourself, I would strongly consider managing your first property yourself.  It will probably be a good learning experience for you (even if all you learn is that you have no interest in managing your own properties), and it will help you save money that you can use to invest in your second property.

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  • Brian Schmelzlen
    Accountant 路 La Mesa, CA 路 Member since 2017 路 477 posts 路 476 votes
    8y

    I think the main value that you would find from a property manager (initially) is screening tenants.  However, there are tons of free resources on BiggerPockets and online in general that would help you screen tenants.

    Unless you truly have no interest in doing it yourself, I would strongly consider managing your first property yourself.  It will probably be a good learning experience for you (even if all you learn is that you have no interest in managing your own properties), and it will help you save money that you can use to invest in your second property.

    3Reply
  • Josh Dillingham
    Rental Property Investor 路 Brattleboro, VT 路 Member since 2015 路 204 posts 路 174 votes
    8y

    that's a personal question only you can answer.  but you can think of it like this: what do you have more of, time or money?  For me I have more time than money and as an investor with less than 3 years experience I find great value in learning all the ins and outs of property management that I wouldn't otherwise understand if I wasn't managing my own properties.

    lets assume you will pay a property manager 10% of gross rents each month.  How much money is that? and would you rather spend an average of 4 hours per month showing apartments, taking tenant phone calls, collecting rents and calling the repair guy and keep that money in your pocket. or would you rather pay the property manager?

    2Reply
  • Daniel Parrella
    OP
    Indianapolis, IN 路 Member since 2018 路 21 posts 路 6 votes
    8y

    Thanks fellas.  I'd agree, at this point it probably is worth the experience alone to give it a go, and 10% for this one would be 150 bucks a month or so.  That's a decent chunk and it does add up over time.  Thanks for letting my pull from your experience.  

    2Reply
  • Daryl Anderson
    Contractor 路 Cleveland, OH 路 Member since 2016 路 116 posts 路 50 votes
    8y
    Daniel Parrella I also would recommend that you manage your first property. The experience you will gain will be priceless.
    3Reply
  • Daniel Parrella
    OP
    Indianapolis, IN 路 Member since 2018 路 21 posts 路 6 votes
    8y

    Awesome thanks man.

    0Reply
  • Caleb Heimsoth
    Rental Property Investor 路 Durham, NC 路 Member since 2016 路 7k+ posts 路 7k+ votes
    8y
    This really depends. If you are local to your properties. Manage yourself for the first couple. If you鈥檙e not local use a PM. I use PMs but I鈥檓 not local. Remember if you do it yourself make sure you do it professionally. Don鈥檛 be too lenient. A lot of DIY landlords are too lenient and get burnt out on it. Or they don鈥檛 do a good job screening. I had a co worker just go through that. He was so burnt out by his one rental he was very happy to sell when he did. Create good systems when you begin so it鈥檒l be easier to manage as you grow
    3Reply
  • Daniel Parrella
    OP
    Indianapolis, IN 路 Member since 2018 路 21 posts 路 6 votes
    8y

    Good advice Caleb.  It does seem like it's important to come up with systems, the hard part is figuring them out.  Do you have any third party systems you'd recommend for collecting rent, or screening tenants?

    1Reply
  • Caleb Heimsoth
    Rental Property Investor 路 Durham, NC 路 Member since 2016 路 7k+ posts 路 7k+ votes
    8y

    I鈥檝e heard good things about cozy 

    0Reply
  • Jason D.
    Rental Property Investor 路 St. Petersburg, FL 路 Member since 2017 路 3k+ posts 路 4k+ votes
    8y
    I dont ever intend on being a sheetrock installer, so I hire someone to install sheet rock. I also have no intention on ever being a property manager, so I hire a property manager. I'm all about doing what I like to do and what I am good at, and hiring out everything else.
    5Reply
  • Daniel Parrella
    OP
    Indianapolis, IN 路 Member since 2018 路 21 posts 路 6 votes
    8y
    Cool, I'll get to googling.
    0Reply
  • Daniel Parrella
    OP
    Indianapolis, IN 路 Member since 2018 路 21 posts 路 6 votes
    8y

    Good advice Jason, I like the idea of at least trying it once.  If I suck at it, I'll be doing the same thing!

    0Reply
  • Raul R.
    Rental Property Investor 路 New York City, NY 路 Member since 2017 路 493 posts 路 386 votes
    8y

    Remember at first you will not know what you dont know.. A good Property Manager will be able to guide you and will help you on your journey. I emphasize on "good" PM they are not all good. If you're an Out of State Investor I recommend find a good PM, if you live close to your property yeah I agree Managing 1 property yourself is manageable assuming you have the time..

    Regardless what you decide, even if you decide to manage it yourself find out whats the average Monthly PM fee for your market is and factor in the expense so if you decide to get a PM in the future you are prepare for it..

    If you go w a PM look for a Company with a team in Place, not a "guy"... I made that mistake learn the importance of going with a Company that has an Office Assistant that handles all the inquiries, work orders,  emails etc and a PM that is pretty much your boots in the grounds for showings or if he is needed at property.

    1Reply
  • Brian Garlington
    Realtor 路 Oakland, CA and a Real Estate Investor with Multi-Family Units and a Self Storage Facility 路 Member since 2016 路 2k+ posts 路 2k+ votes
    8y

    @Daniel Parrella   If you are living within an hour drive of the property and it's anything LESS than a 5plex I would suggest you manage it yourself. I have a duplex and a condo in the Bay Area that I manage myself because they are both within an hour drive of me. I also Am NOT a mechanical, do it yourself kind of person either so here's what I recommend.  

    1. Have the tenants sign an Estoppel BEFORE the deal is closed. You can arrange this with the listing agent through your own agent.

    2. Have the tenants sign a lease that spells out when rent is due, etc and put a clause in there that clearly states that if they want something fixed and it is something that can be done for UNDER $40.00, I.E. Changing light bulbs, then it is the tenant's responsibility to handle this themself.

    3. Buy a Home Warranty for the property, better yet, ask the SELLER to include a Home Warranty (Not to be confused with insurance) for the 1st year on the property. That way if something happens and they need a plumber to go out there, all you are responsible for is a "Co-Pay" of about $70.00.....the Home Warranty company covers the rest.

    4.  In the lease have it explained that if it is an emergency, (The pipes burst at 2:00am) they can call the home warranty company directly and have them come out.....and then of course have them call you. If it's NOT an emergency (Hey the stove won't turn on?) then they should call YOU first,...that way you can figure out if it's simply a blown fuse or if the circuit breaker tripped before calling the Home Warranty company.

    Hope this helps.

    I also have rentals in Cleveland and THAT is NOT an hour drive from me....in a case like that I made sure to get a property manager in place BEFORE closing  

    1Reply
  • James Wise
    Real Estate Broker 路 Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH 路 Member since 2013 路 31k+ posts 路 20k+ votes
    8y
    Originally posted by @Daniel Parrella:

    So I'm THIS close to finally closing a deal!  Pretty excited to dive in and get going!

    That being said, as I get closer I'm starting to think more about whether I should use a property management company or not.


    Does anyone with some experience have any input on the things I could run into trying to manage it myself?  I'm prepared to take phone calls and coordinate handymen, etc, but I'm just starting to wonder if the time I'd invest would be worth it.  

    Finally, if anyone has any good references for a property management company in the Cleveland Ohio area, I'd love to reach out to them and get prices/products.

    Thanks as always!

     If the property was local to you I'd say go for it. Some folks are terrible PM's but in general a small portfolio isn't too difficult or time consuming. However I'm gathering it's in Cle & you are in Indy? If that's the case you gotta outsource the PM. Managing long distance is a no go. 馃毇

    1Reply
  • James Wise
    Real Estate Broker 路 Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH 路 Member since 2013 路 31k+ posts 路 20k+ votes
    8y
    Originally posted by @Caleb Heimsoth:

    This really depends. If you are local to your properties. Manage yourself for the first couple. If you鈥檙e not local use a PM.

    I use PMs but I鈥檓 not local. Remember if you do it yourself make sure you do it professionally. Don鈥檛 be too lenient. A lot of DIY landlords are too lenient and get burnt out on it. Or they don鈥檛 do a good job screening.

    I had a co worker just go through that. He was so burnt out by his one rental he was very happy to sell when he did. Create good systems when you begin so it鈥檒l be easier to manage as you grow

    Good point. If you have a soft spot self managing is not for you. Being too soft is one of the biggest things that cause DIY'ers to loose money. 馃捀 You give an inch tenants take a mile & then some.

    2Reply
  • Matthew Irish-JonesBusiness Member
    Real Estate Agent 路 Buffalo, NY 路 Member since 2017 路 2k+ posts 路 2k+ votes
    8y

    Daniel, I think it depends on what you are looking to do long term.  Do you want to be a Property Manager, managing all of your own assets?  Or do you want to be a passive investor analyzing deals, acquiring financing, and allowing other people to run the operations?

    One advantage of using a PM company is they generally can get things fixed quicker and cheaper than you can.  If you call a plumbing company for an issue you will pay at the very least Market price... Most good PM companies are going to have an establishes relationship with local vendors and actually be able to save you money on maintenance.  

    Food for thought!  Good luck!

    Full disclosure..  I started in the Biz by managing all of my own properties...  I ended up starting a PM company because of it.  Most of the people I know and work with went the opposite route and are passive investors, different strokes for different folks. 

    Irish Jones Realty4.948 Reviews
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    1Reply
  • Daniel Parrella
    OP
    Indianapolis, IN 路 Member since 2018 路 21 posts 路 6 votes
    8y
    Thanks for all the input! I am in Indy, but I do however have a partner within about 15 minutes of the property. I'll definitely have to discuss it more with him to insure he's ready for the problems being a PM could present.
    0Reply
  • Ned J.Pro Member
    Investor 路 Manteca, CA 路 Member since 2017 路 1k+ posts 路 2k+ votes
    8y

    A big misconception is that a PM will do everything for you, as well as you would do yourself. YOU still need to manage the PM to make sure things are going according to YOUR plans, wishes and expectations.

    Just like every industry, there a fantastic PM's and there are complete morons....if you have ZERO clue or experience being a landlord, you wont know which spectrum they are at until it may be too late. You wont have any idea on the best questions to ask to even pick a good PM etc.

    I'm a big believer in managing your first couple yourself....assuming they are close enough to you...or another trusted party. Then once you get some first hand education, and start to upscale, you start hiring a pro

    1Reply
  • Jeff Lindborg
    Investor 路 Tucson, AZ 路 Member since 2017 路 3 posts 路 3 votes
    8y

    We started with a property manager handling 2 rentals we got when we moved down here - on the whole it was good to ease into it like that since we were totally new to the business and I was still working full time back then and didn't think I could carve off the time to manage properly myself - but when we filled out to 7 properties and I switched to part time work we took over managing ourselves (using Buildium) - it can be a little scary when you first start, I remember!   

    When we cut the cord and took over managing on our own, I actually got a lot of good info out of this book from some Bigger Pockets folks (https://www.amazon.com/gp/product/B018W8HSP6) - lots of good, practical advice on what it takes to manage properties, organizational systems that work, advice on lease content, even down to how to file your paperwork efficiently - definitely worth reading if you want to mange yourself, even with a single property.  After reading through it, taking notes, buying a big filing cabinet and all that good stuff I was a lot less nervous. 

    2Reply
  • Morgan Klein
    Rental Property Investor 路 Jefferson, GA 路 Member since 2017 路 95 posts 路 145 votes
    8y

    I bought my first two rentals last year and went with a property manager.  My wife and I have full-time careers and three young kids.  At this stage, managing our own properties is not a viable option.  Between work, family, school, sports...we don鈥檛 have the flexibility to deal with unexpected issues.  Our property manager kicks butt, too.  She only charged us $150 to find tenants and filled one house in 24 hours and the other in less than two weeks.  Plus no charge to renew contracts for existing tenants, once that time comes.  She takes her 10% every month, makes repairs as needed, and I collect the checks.  Couldn鈥檛 be happier!

    1Reply
  • Bjorn AhlbladPro Member
    Investor 路 Shelton, WA 路 Member since 2017 路 6k+ posts 路 6k+ votes
    8y

    I have some professionally managed and mostly self managed. As long as you screen thoroughly and do some preventive maintenance. self manage is really pretty easy.

    0Reply
  • Milad Awadallah
    Pompano Beach, FL 路 Member since 2018 路 8 posts 路 4 votes
    8y

    As everyone has mentioned, there is always someone who says "I wish I did it myself" when they hire a property manager, and the ones that say "Damn, its not worth the headache". I understand I am not adding much value with this post, but if I can contribute anything, I would say give it a shot and see if you would rather pass it on - you are more familiar with the properties location and the potential tenants it will attract. If it has a higher price point, you just might (keyword might) have an easier time. 

    Whatever happens, wish ya the best!

    1Reply
  • Minna Hu
    Rental Property Investor 路 Toronto ON, Canada 路 Member since 2015 路 58 posts 路 11 votes
    8y

    If the purpose of hiring a property management company is to hand off all work/responsibility/decision making to them without any kind of supervision, especially tenant criteria or repair budget, you will soon lose control of your income and expense, like we did.

    Since this is your first property, you may want to try managing it yourself, and gain as much knowledge as possible by doing it yourself. If it becomes overwhelming for you, the knowledge you learned along the way will help you to select good property management company and supervise as needed. You won't waste your experience of doing it yourself.

    1Reply
  • Felicia Elliott
    Rental Property Investor 路 Portsmouth, VA 路 Member since 2016 路 38 posts 路 13 votes
    8y

    I was a PM for 10 years managing someone else assets and I鈥檓 now crossing over into acquiring my own properties.  Initially,  I plan on managing my own properties and will eventually hire a PM. 

    As stated in the forum, there are pros and cons to both managing the property yourself  or hiring a PM.  I loved being a PM.  I鈥檓 so glad I have gain the knowledge ( fair housing law, landlord tenant act, timeframe to return security deposits , handling complaints, etc)as a PM because it has arm me with the skills  to  become a great Overseer 

    1Reply
  • Daniel Parrella
    OP
    Indianapolis, IN 路 Member since 2018 路 21 posts 路 6 votes
    8y

    Fantastic opinion everyone, I really appreciate you taking the time to respond.  It seems like there is a somewhat general consensus of, at least give it a shot and see if it's for you.  I think that's probably what we'll do.  You guys rock.

    How about lawyers and CPA's, did any of you have them involved from the get-go?  In what capacity?

    0Reply
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