My realtor has suggested possibly outsourcing the property management or properties, maybe larger ones.
Has anyone had experience with this and what are the pros/cons?
Are you talking duplexes or apartments? How many do you currently own?
I am just about to offer, none under contract yet but it will most likely be 8 and above, looking at an 8, a 12 and larger. I hadnt heard of outsourcing before but just wanted to get some feedback on if anyone has!
@Shaun Anderson hiring professional property management is the difference between being in the property owning business and being a landlord. Having grown up in the landlord business I much prefer the property owning business. For a small portion of collected rents someone else will handle all the tenant issues from marketing vacant units to evicting them if necessary. The property manager will coordinate maintenance and repairs and prepare the financial reports for your review. It also means no middle of the night phone calls to you from tenants.
While the 'sticker rate' many property managers quote is in the 5-6% of Gross Operating Income range, figure all in with assorted fees and charges it will run 9-10% of GOI.
The key of course is to find a good property management company, one that is competent, honest and fair. The second key is that your job is to manage your property manager to make sure they are achieving your goals for the property.
A quick Google search on Regina property management brought up seven names. To find the good ones I recommend joining your rental housing or landlord's association. Attending their meetings will allow you to network with other property owners and get the straight story on who to hire and who not to.
haha thanks for the info, very insightful. However, I am looking at properties in Columbus Ohio not Regina where I live, way too expensive here!!
I personally manage all my properties from a distance. So I guess I am a "landlord". On the other hand I have class A property so the hardest part is installing the tenant. As long as I do a good job the rest of the time is pretty quiet. I prefer being the manger because I have better control. I save 15% of the rent collects, even more when just looking at profit margins.
@Shaun Anderson unless you're planning to move to Columbus, you will definitely have to outsource the prop mgt in order to keep an eye on things and provide good service for your residents.
That said like @Elizabeth C. points out, you will have more control if you do it yourself and it will be quite an education... but that 2,500km commute will be a long one... and the time change, isn't Columbus 2 hours ahead of you now?
I would find the apartment owner's association(s) for Columbus and start networking, the information you receive from fellow owners is far superior to anything the 'gurus' are pitching.
I do it with a 3 hour time change and across the country. It is doable. It has it moments stresswise, but financially it is beneficial and I have more control over my properties.
@Shaun Anderson Being a non US citizen, you are not allow to work IN US.
Even collecting rent, repair or maintain your own property.
You can however, hire & manage your property manager to manage your properties.
So do not get caught with doing work yourself, you may get into trouble with the US custom & Immigration.
@Elizabeth C. I admire your energy, stamina and willingness to fly back and forth and sleep in hotels... and pay for all of that. Of course if the properties are located in places you want to visit making them work/play trips is great.
Personally I get all the business travel I 'need' during the market research, due diligence and acquisition phases. Once a quarter after that usually is enough.
We happen to own in locations that we use to live and have friends. Our house in Virginia Beach was were we use to live. Charleston our favorite city/where my husband went to school. So whenever we have to go back I turn it into a vacation. I stay with my friends and have fun while working on my houses. So for me it works.
I totally agree that having a property manager works for many. I just wanted to point out another side.
Shaun, Just wanted to add that even if you do hire a property manager, you'll want to make sure you factor in your own visits for inspections. We try to get to our out-of-state property at least once every year and-a-half as no matter how good the management is, they don't check on things with the same eye as the owner would. We do maintenance required while there and usually plan it during one of the vacancies so we can save on turnover costs through the management company as well. Also, we like to try to have PM schedule any extra work, like trimming trees/shrubs, etc., right before we come so we can check the work ourselves. It's good to make sure the management company knows you care about your properties and will be checking up on the work done. Last time, we had to have the landscaper come out and re-do all the work as he did such a poor job and actually dumped the trimmings in the woods behind the house even though he charged to haul them away. When we pointed it out, the PM said she didn't usually check back there so wouldn't have known, and now knows that she needs to find a better landscaper.
I am a realtor in the columbus area and my company has a property management group inside of us ( anther realtor who enjoys it and she has several investors she works for including over seas investors ) i be leave we charge 10% if we do everything is we just list it and find a tenant for the property i think its 1 months rent. Now what we do is different then most other companies, one we only take houses in good locations to find a mrs long term tenant, and then we do a pretty extensive background check. I tell you these things so that you know what to look for in a company. If you call up a company and they don't care to ask you a bunch of questions about the your property and they are just telling you how much they are going to charge i would just hang up the phone. Other things to look for ask them how and what they do for a background check, how do they determine if they qualify to rent from you, what happens if they miss a payment, do they have contractors names that are ready to go out and do repairs for you if needed and if so get the names and numbers of the contractors so you can look them up and ensure they do quality work. something else to factor in, if something goes wrong ( water leak ect ect ) do you want to direct hire someone or do you want to be 100% hands free and just get a bill when its all said and done?
@Elizabeth C. those sound like great places to 'have' to go to.
The math and the logistics of managing apartments are very different than an sfr though. @Shaun Anderson the OP was specifically asking about small apartment buildings and they typically are much more management (or landlord) intense.
I almost fell out of my chair when @Lynn M. said she only visits her property once every year and a half, then I realized she was talking about a house. For our asset management clients either we or they walk the property every quarter with the property management team.
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