How soon do Property Managers realistically onboard a new tenant?

Question

I'm having trouble deciding on whether to hire a PM for rental 1.

I close on my 2nd house with owner occupied loan next week. I've been house hacking rental 1 and will be moving into rental 2 with my tenant/roomate (cool dude). Rental 2 will need a few weeks to renovate before fully moving in (paint, cabinets, flooring, tile). I will be doing all that work myself then using plumbers & electricians to trim out the house. My fear is losing money in vacancy and regretting not just hiring a PM to quickly onboard and screen a tenant properly. A good PM around me charges 30% of rent to onboard then manage it for 10% / mo (only 1 unit to manage). My payment is $980 and market rent for my neighborhood is $2000 (per multiple PM's, 4 bed 2 bath). So roughly $3k a year expense for PM minus any maintenance costs. There's room there to pay a PM but I also work in construction in homebuilding so I have a team of trades/punch guys to manage repairs.

But if I end up eating monthly vacancy expenses at rental 1 because I can't efficiently onboard a tenant for applications, screenings, showings, etc while renovating / moving into rental 2, than that $600 onboard fee would sound nice to pay for assuming they can get me a good tenant within a few weeks. But I know I can easily manage just 1 rental myself since it's local and I lived in it and renovated it myself and know the ins and outs of the home.

Tried to keep this short as possible while still providing as much info as possible given my situation. Thanks

V.G Jason · Answer

If a minute amount of vacancy is a big stressor, you're not equipped to invest in real estate.

With PM, you also got to factor another layer of liability. If you can't manage to understand that then again I stick to what I said above.

In Q2/Q3 it'll take them 15-45 days. In winter, probably on the longer end of that, if not even longer.

Chris Rich · Answer

Vacancy periods are going to happen, its apart of owning LTRs. I recommend to my clients to put aside 3 months of mortgages and $2-4,000 for turnover costs. This should cover most turnovers outside of an eviction. As for the onboarding time, assuming the property is rent ready, we are usually able to list within 48-72 hours of onboarding. If it's a unit turn in-between tenants, our target is 10-14 days for the inspection, vendors providing estimate, and completing the work (depending on depth and scope of work.)

Michele Fischer · Answer

Agree that vacancy is part of the deal.

In my mind your big tradeoff is whether you can effectively and efficiently do the paperword side of the landlording for one unit. You can clearly do the maintenance part, but do you know how to get credit checks and how to spot a good vs bad tenant... it's a lot of overhead on one unit.

I watch Craigslist to see how long our local PM's advertise units, that is a good indication of how long it might take. We have our properties spread across two PM's. One has a wait list and there are hardly any days of unpaid rent. But high turnover. One has very low turnover but is very picky in qualifying applicants and the units can sit empty for months. I knew this going in and strategically chose the properties to send to each PM, you can interview them and others and watch the local market to find the stregths and weaknesses.

WIth a PM you lose a lot of control, but you also have more time to spend on other things, like buying more properties. We self managed for several years, loved it, but loved getting out of it too. The first was the hardest, because we were so naive even with a lot of studying.

Preston Dean · Answer

man, Im like you. I'd like to do all the work I possibly can without hiring it out.

However, hiring a good PM is worth it if you don't have the time or availability to do it yourself.

If you can use that time to save you some money & you are okay with the trade off then I say do it. & it sounds like you have that ability to do it.

maybe create a PROS/CONS board and pick the one that has less on the board

Keep us updated on what you decide!

How soon do Property Managers realistically onboard a new tenant?

How soon do Property Managers realistically onboard a new tenant?

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