Cutting the cord: Ditching the Property Management Company

Cutting the cord: Ditching the Property Management Company

Rental Property Investor · Cranberry Township, PA · Member since 2017 · 80 posts · 27 votes

In the beginning... my childhood friend introduced me to Biggerpockets and the fire was lit inside me. I had huge aspirations to grow fast and big. I established an LLC and even started paying for a web address, but never made a web page. I dreamed of owning 100 unit apartment complexes and retiring early. Then I bought my first investment. It was a flip and it was a success. My thought was to take the winnings of my flips and buy rentals. I did that with a 4 plex. It was purchased fully rented and the plan was to use a Property Management Company to take care of it. I quickly learned of the limitations of property managers from their service area to limited resources to limited contractors to fix things. The last straw was when they renewed a lease without our knowledge and didn't raise rent. We let them go and tried on 3 more property managers for size. We found things we didn't like like how perfect they wanted units rehabbed in C class areas or charging us $70,000 to rehab a small apartment when we can do a whole house rehab for that much. One property manager even died while servicing our rentals! We are at wits end with property management companies and have decided to manage the rentals ourself. When we get big enough, we will hire our own property manager who will be on our payroll. Does anyone have tips, advice, podcasts that you can share to help us as we gear up for this next chapter in our investment life? We still have big aspirations and have learned the way to NOT get there.

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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
4y

I have always self managed my LTR's and my Vrbo Lake house. The thing is when you set up systems it is so easy to self manage. I don't chase rent. They pay or I will file.an eviction. Sure I work with people that are want to be helped and are trying. I teach them to text me and if something needs to be fixed I just text my HVAC guy or handyman and they take care of it. 

Then once you quit your day job you have more time to take a text or 2 a week and pay a contractor to deal with any repairs.

I have retired early from all my rental income and I still see no reason to have a PM.

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    4y

    I have always self managed my LTR's and my Vrbo Lake house. The thing is when you set up systems it is so easy to self manage. I don't chase rent. They pay or I will file.an eviction. Sure I work with people that are want to be helped and are trying. I teach them to text me and if something needs to be fixed I just text my HVAC guy or handyman and they take care of it. 

    Then once you quit your day job you have more time to take a text or 2 a week and pay a contractor to deal with any repairs.

    I have retired early from all my rental income and I still see no reason to have a PM.

  • Rental Property Investor · Cranberry Township, PA · Member since 2017 · 80 posts · 27 votes
    4y

    @John Underwood thanks for the info. Do you use a software to manage tenants or have a website to set up a self self pay or submit maintenance tickets?

  • Santa Clarita · Member since 2021 · 13 posts · 5 votes
    4y

    Following.  I'm in the same boat.  We live several states away which is why I initially went with a PM but we are struggling and I feel very disconnected from what's going on...

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y

    @Steve Vaughan   Steve is another hands on landlord that gives great advice for those wishing to self manage.

  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    4y

    I use Excel to manage many properties. It is very powerful and customizable. 

    I collect rent via, Zelle, PayPal, Venmo, ACH and deposit into my business account.

    I make it as easy as possible for people to give me money. 

    I do not ever go to collect rent. It is automated or I find a new tenant.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    4y
    Quote from @Adam Endeman:

    Following.  I'm in the same boat.  We live several states away which is why I initially went with a PM but we are struggling and I feel very disconnected from what's going on...

     for the out of area landlord this really depends on Asset class and tenants.. I had a bunch of new construction  A class in Madison MS back in the day I started with PM but my white collar tenants were easy and I just pitched it over to my secretary to handle and we had no issues.  Houses were new and tenants very respectful lived very neat and clean many were building 500 to 1 mil dollar homes and needed one year rents. 

    I do the same in Vegas  A class A tenants and we self manage those from afar.  

    BUT when i had C and D class NO way no how could i manage those from afar.. age of asset older tenants rough on houses by and large highly needy etc. PM was / is mandatory at least for me personally.

    PS  @Preston Gealy   I was in Cranberry Township one week ago today looking at some of my clients inventory in the surrounding little towns.. We ate at Off the HOOK  great restaurant and fabulous wine list Cranberry proper from what I saw is EXPLODING with new construction.  Also @jim k is in your neck of the woods is a very good resource for realistic expectations of managing C class props in your area. 

    @Jim K.undefined

  • Rental Property Investor · Cranberry Township, PA · Member since 2017 · 80 posts · 27 votes
    4y

    @Adam Endeman I feel that managing my own properties is not very scalable but I know with the few I have now, we are losing money each month...

  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    4y

    You can be as detailed or as "loose" as you want, depending on your personality traits.

    We've never found loose to work that well, but others have.

    Would recommend documenting all your processes though, in case you get sick or scale enough to hire someone. Written processes force you to think about what you're doing and you often find more efficient ways to do things. Also makes training easier.

  • Rental Property Investor · Cranberry Township, PA · Member since 2017 · 80 posts · 27 votes
    4y

    @John Underwood Thanks, that is how we plan to manage them. I guess it works!

  • Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
    4y

    Try AppFolio to manage your rentals!

  • Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
    4y

    I rehab our properties,self manage, and maintain. Can’t tell you how easy it is. My wife handles the book work/bill paying/Venmo receiving of rents. I do everything else. 
    When you do a good solid rehab, you barely ever get maintenance calls, and when you have good tenants, you barely have any issues. I wouldn’t give it up for anything. I know a lot of people in the business, and no one will ever care about your investment like you would. 

  • Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    4y
    Quote from @Jay Hinrichs:

    @Steve Vaughan   Steve is another hands on landlord that gives great advice for those wishing to self manage.

     Thank you Jay, but I only operate in my backyard and software / touchless virtual systems are definitely not my strong suit so I wouldnt be much help here. 

    75% of landlording is placing a quality tenant that is a good fit for the property so I focus on that and keeping the licensed electrical, plumbing , hvac and  agent needs down.  Can't be handy and creative if I'm not there. 

  • Rental Property Investor · Cranberry Township, PA · Member since 2017 · 80 posts · 27 votes
    4y

    @Jay Hinrichs thanks for the info! I'll give Jim a holler to see where he has rental units!

  • Investor · MI · Member since 2015 · 227 posts · 478 votes
    4y

    Go into it with your eyes open, and read about all the mistakes people make here and add to your systems to prevent those mistakes from happening to you.

    Now as far as milestones that made my life easier there are a few that stick out, the majority of my renters are students so YMMV

    -1 dwelling unit, one rent check no exceptions.

    -E-payments, I do not accept paper money or direct transfers of any kind(in the early days Venmo, now a new system..)

    -Docusign leases

    -Stopped chasing the cheap handyfolk

    -Innago or similar. I can screen tenants with a custom application, e sign a custom lease, accept deposits ACH'd to my account, and then accept rent payments ACH'd to my account. Also I can send bills and it automatically tacks on late fees and sends tenants reminders.

    You won't regret passing on a tenant, but you WILL regret making an exception.

    Treat tenants how you would want to be treated yourself no matter how frustrating they are, they are your customers. It may be your house, but it is their home.

    Don't sweat the small stuff. This is a lot easier if your cash flow is good.

    Be specific when dealing with tenants

    If you have more specific questions myself or someone else can probably help

  • Andy WebbPro Member
    Rental Property Investor · Carrollton, TX · Member since 2013 · 750 posts · 538 votes
    4y
    Quote from @Austin F.:

    Go into it with your eyes open, and read about all the mistakes people make here and add to your systems to prevent those mistakes from happening to you.

    Now as far as milestones that made my life easier there are a few that stick out, the majority of my renters are students so YMMV

    -1 dwelling unit, one rent check no exceptions.

    -E-payments, I do not accept paper money or direct transfers of any kind(in the early days Venmo, now a new system..)

    -Docusign leases

    -Stopped chasing the cheap handyfolk

    -Innago or similar. I can screen tenants with a custom application, e sign a custom lease, accept deposits ACH'd to my account, and then accept rent payments ACH'd to my account. Also I can send bills and it automatically tacks on late fees and sends tenants reminders.

    You won't regret passing on a tenant, but you WILL regret making an exception.

    Treat tenants how you would want to be treated yourself no matter how frustrating they are, they are your customers. It may be your house, but it is their home.

    Don't sweat the small stuff. This is a lot easier if your cash flow is good.

    Be specific when dealing with tenants

    If you have more specific questions myself or someone else can probably help


     Great tips, and I especially love this one:  "Stopped chasing the cheap handyfolk"

    That alone can turn into herding cats.  I am fine to pay a little more for a consistent response rate, decent turn around time and quality work.

  • Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    4y
    Quote from @Preston Gealy:

    @Jay Hinrichs thanks for the info! I'll give Jim a holler to see where he has rental units!

    Hi Preston, I'm down in Allegheny County. My brother lives up in Cranberry. My units are just south of Pittsburgh. Looking forward to talking to you.

  • Investor · Spokane, WA · Member since 2015 · 238 posts · 133 votes
    4y

    Thus far I've had nothing but bad experiences with property management companies.

  • Rental Property Investor · Kokomo, IN · Member since 2016 · 4 posts · 1 vote
    4y
    Quote from @John Underwood:

    I have always self managed my LTR's and my Vrbo Lake house. The thing is when you set up systems it is so easy to self manage. I don't chase rent. They pay or I will file.an eviction. Sure I work with people that are want to be helped and are trying. I teach them to text me and if something needs to be fixed I just text my HVAC guy or handyman and they take care of it. 

    Then once you quit your day job you have more time to take a text or 2 a week and pay a contractor to deal with any repairs.

    I have retired early from all my rental income and I still see no reason to have a PM.

  • Rental Property Investor · Burlington County, NJ · Member since 2019 · 540 posts · 771 votes
    4y

    We've found, in real estate and in the professional world in general, most people will settle for being average or below-average performers.  While it means it is hard to get good help, it also means that with the little extra effort my wife and I put in, we seem to reap plenty benefits.  We've self-managed from the start and only recently hired a part-time 1099 employee, someone who used to work for my wife in a former different field, who we're teaching the business and who will eventually, fingers crossed, be our property manager. 

    Tools we use:

    -Sideline - for incoming phone calls and messages

    - Rentler - for screening prospective tenants, receiving rent digitally, etc. Free to landlords

    - Eversign and Signwell - Electronic signature portals for leases. Each offer a small number of free sends per month and together, we can do all of our leases for our 7-home portfolio

    - Stessa - Accounting - Free to landlords

    - Facebook, our own website and google my business as ways to have a professional face to the outside world and when our potential residents google us

    - Facebook marketplace, Zillow, Rentler - advertising for tenants - all free to us

    Our tenants are C/B class except for two mid-term/corporate rentals, for which we also advertise on Airbnb.

    Now, if it were not both my wife and me doing this, it would be a challenge. But we split the work and, as I share above, we're training up a smart professional with good people skills and judgement, and someone we trust, to be our property manager.

    Best wishes to you!

  • Rental Property Investor · Cranberry Township, PA · Member since 2017 · 80 posts · 27 votes
    4y

    @Matt M. How do you handle advertising for vacancies and evictions?

  • Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    4y

    @Preston Gealy

    Facebook Marketplace is pretty much king when it comes to advertising in a broad-based way in our area, Preston. You do a sponsored listing, pay FB like $11 to get the word out to LOTS of people, and then you just start weeding out the flakes.

  • Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
    4y
    Quote from @Preston Gealy:

    @Matt M. How do you handle advertising for vacancies and evictions?


     Very simple. Facebook Marketplace will bring me 100 messages in 24 hours. 
    Evictions are easy, go to your local magistrate office and file. Typically $140-150. Hearing in approximately 14 days, day 11 after the hearing (if they don’t pay up), the constable meets you at the property  so they can either make the tenant leave if they are there, or make sure all is well and you change the locks and it’s done. 

  • Specialist · Easton, PA · Member since 2018 · 1k+ posts · 2k+ votes
    4y

    @Jim K.

    I’m catching up to you pal, I’m only 9,858 votes behind! 

  • Colleen F.Pro Member
    Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes
    4y

    @Preston Gealy lots of good advice. Two things I would add pick low maintenence tenants and always find a real person to cover if you are out of country. I pass on tenants that make lots of requests on showing or pre-lease, they always need a lot of attention. The biggest issues happen if you are not available always.

  • Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
    4y

    @Preston Gealy Starting out with full featured property management software was instrumental in letting us grow quickly because available features allowed us to get processes and management systems in place for marketing, accepting applications, e-leasing, rent collection, maintenance tracking, and accounting (we use Buildium). I'm with @Colleen F., look for cooperative, low maintenance, non-needy tenants and also look for newer for your area low maintenance properties. We especially love groups of brick ranch style duplexes and we (now) avoid 100+ year old money pits. We also renovate our own units so we know them well and know where the maintenance problems are likely to pop up.

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