I'm looking to purchase a 2-4 unit owner occupied property in an A/B neighborhood in the capital region of Upstate NY. How many hours/week would it take you to manage a property like this on your own? What technology/apps/systems have you used to decrease the amount of time spent on managing a similar properties?
While I am in a completely different area and market, I do believe I have some decent insight for you.
The answer to your question is heavily dependent on multiple factors such as being a good manager of things generally speaking, how well you do your tenant screening, how comfortable you are with bookkeeping (if you are going to do it yourself), if you have a good selection of service providers in the area etc.
In general I would say that if you are comfortable with bookkeeping, do a good job screening, you have a property in good condition, and you take the time to properly educate your tenant on communication and maintenance procedures, expectations of both parties, and responsibilities, you'll have no problem self managing 1 duplex on your own with very little time dedication.
Typically you will probably spend 15-20 min a month on bookkeeping and entering transactions, and that is about it. The things that will consume more of your time will be maintenance calls and/or coordination (these don't happen every month, especially in a good property with a good tenant), communications with tenants about lease renewals or violations, and of course evictions (hopefully you can avoid these of course). If you are doing maintenance yourself, it can be quite time consuming, and frustrating if you are a busy person with little handyman experience/capabilities. If you outsource your maintenance, the key will be having a good network of easy to deal with service people such as Handymen, Plumbers, Electricians etc.
For tenant management, I use RentRedi and think it is very useful. It allows you to collect rent online via bank transfers which tenants can set up for automatic payments. They can also submit maintenance requests through the app and include a short video and description, which you can the forward to the appropriate service provider to start the coordination to get the issue resolved.
Lastly, if you want to be involved as little as possible, consider hiring property management and bookkeeping. This could end up being time consuming as well so be sure to interview and do heavy due diligence on a property manager before hiring, I am speaking from experience! I am currently transitioning into self management of my small portfolio because I think I can run it better and dedicate less time to it by running it more efficiently eliminating many of the current problems I am facing. I am in a small market with limited options for management.
Hope this helps!
@Kole Kingslien Thank you, Kole. That was very helpful. In your situation, do you see a point at which outsourcing a property management company will become a better option than managing yourself? If an increasing number of units is the reason for outsourcing (what I would assume, correct me if I'm wrong), what do you foresee that number of units to be?
I self manage and self perform most maintenance requests. I probably spend about about an hour a month on book keeping and maintenance. Some months it’s a few hours and some months there is literally nothing to do. We also rehab most our properties prior to leasing. Prepare to spend 5-10 hours on lease up and equal that for making the unit rent ready though.
Yes, I do see a time where outsourcing would be better if not necessary. I think it's really going to depend on tenant and property class. For example, 20 A class Properties with A class tenants are going to be 1000 times less difficult and time demanding than 20 C class Properties with C class tenants.
For me personally, I would probably want to start getting really serious about outsourcing management around 30 units or more. I don't think it would be very easy to self manage this many while maintaining a full time job and normal life. You'll get a much better feel for how many that will be for you personally after you start. I promise, it's not as scary as you may think!
It depends on how organized you are!
Short-term pain to setup systems, for long-term gain of time savings.
Also, THINK AHEAD! Once you buy one, you'll probably buy more.
1) Us Quickbooks and set up Classes for each property and subclasses for each unit.
2) Scan EVERYTHING to either Google Drive or Dropbox.
3) Create a consistent folder-tree convention, example:
Main_123 (property address with street name first)
-General Property Info
Appliances & Mechanicals (pics, model tags, warranties, etc)
4) Create list of consistent naming conventions for files so you don't have to open them
Example: yyyy-mm-dd Main_123 Water Bill mm-dd to mm-dd $xx.xx
Lease Main_W_123_#unit (LastName_1stInitial) $RentAmount EXP yyyy-mm-dd
5) Create a great lease by reviewing several from online, then have attorney review for compliance with state & local laws. Update annually as, "tenants teach you lessons".
6) Take videos for Tenant MoveIns, making sure they give you permission to take & use the video - in the video itself. This will document the condition much better than any paper MoveIn Checklist (still do that in case you lose/corrupt video). Also, take video for Tenant MoveOuts for same reason.
Keep looking for efficient ways to do things!