I have heard bad stories about property managers, which is also attested to by this post:
It seems that there are many good, hard-working individuals that could do property management. I have 1 rental and am considering purchasing a second one within the next week and I have no desire to continue self-managing. What's to prevent me from advertising for and hiring an individual with no experience in property management, and then training him? I have not decided about screening/finding tenants, as I have a lot of experience in this and may continue to do this. I would also have rent sent to me directly (or my company), so the property manager field all calls from tenants, troubleshoot problems, and I would find someone who is handy so she could do any small fixes in the units (I am not handy).
Has anyone done something like this? How would I determine a fair compensation? As I have invested a lot into improvements/maintenance I do not anticipate that there would be much for the property manager to do.
I have. Compensation depends on what they do.
In most states, in order to manage a property for someone else for a fee the person needs to be licensed (or employed by a prop mgmt company of which someone there in the organization has a brokers license). I would never hire someone who thinks this is just a desk job and try to train them yourself. Sure, show apartments and entering rent deposits are basic customer service and administrative type things- but think about things like Fair Housing and other legalities involved.
When I started working in property management a few years ago, I had no background in it. I was hired by a prop mgmt company and had a regional manager to train me, but I kid you not- when I got the job and before I started I literally read "Property Management for Dummies", just because I wanted to start somewhere with terminology and what I could expect and all. I now work with a well known multifamily developer, and training and education is always ongoing, and I am supported my many chains of command.
I would never hire someone with no real estate license or property management background to manage my assets. To me, that would be like trusting a person that can cut grass to run it the way that it should, handle day to day, tenant relations, not getting into legal trouble, etc.
If you do not want to self manage, please just do your research and find a good real estate company that has a management arm. They are out there.
So, what's to prevent you from just hiring anyone and training them, you ask?--> Hopefully the good business sense that I know you have! Also the desire to not create MORE risk for yourself :)
Also, depending on the supply of quality PMs in your area and the size of property, I think between 6-10% is fair.
@Donald M. I would steer away from hiring someone with zero experience to manage your properties. But, a good alternative would be to find a real estate agent who wants to make some extra money. The learning curve is much shorter and you'll probably have more success.
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