How passive are rentals with a property management company?

7 Replies


I'm brand new to real estate investing. I am a partner in a business that has a very strong monthly cash flow and I'm looking to use that cash to acquire multi unit rentals. The main issue I have is my lack of experience. I'm not a handy man what so ever and I do not want to get dragged into the day to day of being a landlord.

I realize where my strengths and weaknesses are and that is why I am planning to utilize a property management company.

My question is, are my expectations unrealistic of being a mostly hands off real estate investor? Can a property management company handle 99% while I continue to manage my daily business and hunt for more deals? Also are there any resources I can turn to if other people like me? Would love to have a mentor whose been in the same situation!

Thanks much in advance!!!

That's a very broad question that really depends on what you negotiate with the management company. The more you ask them to do the less passive they will be and the more it will cost. But, unfortunately or me, I'm more of a retail investor lol. I can't change a light bulb to save my life. When I've used management companies in the past, I've had them handle everything.

Ok that makes sense. The company I've been looking at has a pretty decent list of task they cover which to me seem to be all, but again I'm still a noobie so who knows. They are charging 10% plus first month when finding a new tenant

@Loren Thomas

1. How competent is your PM?

2. How much control do you want or willing to give up? 

If you have an experienced PM who is able to communicate well to you/your tenants and meet your expectations, great. 

In the beginning, you have to start off by managing your PM. And if your PM is not performing, you need to step up as it's your property. 

Recognizing your own strengths and weaknesses up front puts you years ahead of most new investors.   A good PM will actually prefer to handle everything and for you to stay out of the picture. Your job should be managing the manager (politely) and nothing else.  Keep solid communication but stay out of the way and let them do what they get paid to do and you'll have a positive experience. 

If your manager is not NARPM accredited you better look very close to make sure they actually know what they are doing. 

agree with Robert  we are Canadian  investors so for us everything is done at  arms length so our property management companies  handle all  the say to day affairs .... the secret is to have a company that you can trust... we  do take trips to the states to meet with the key people on our teams and  are doing well  with our investing as of today

If they're charging first month tenant placement and 10% of rent then they should be handling everything enabling you to be 100% hands off. Unless they're a bad property manager, in which case you should can them anyway. 

I prefer owners stay hands off. This is what we do, we have policies in place for every situation the owners should judge our overall performance, not need to be involved. Pm is running a small business, monthly reports and photos should keep you up to date on how your business is doing.

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