I'm currently considering changing career paths into property management. Not only would it increase my salary, even starting out, but I think it could provide for a critical eye in REI, to really evaluate what needs to happen to a property, what it's worth, and in general augment my ability to be a buy and hold investor.
I am curious just how much property management itself would help my cashflow. I'm assuming that when I have a few (1-5) properties, my skills acquired on the job (and supposed connections i would acquire, like handymen and contractors) would make being the PMan for them entirely doable. But would the savings I make by being my own PM be significant?
Beyond that, about when would most of you estimate that being my own PMan would have diminishing returns? By that I mean: how many properties can a PM reasonably be expected to juggle simultaneously, if they are not in one building? While I understand that my efficacy on the job is a determining factor, and that everyone is different, I would really appreciate a rough idea of this. Is it unheard of for one person to juggle thirty properties at once? Would managing thirty properties at once essentially be a full-time job, as I imagine it might? Would juggling those thirty properties and also continuing to build my little REI empire be too much work for most?
In general, I am interesting in hearing about the merits (and problems) of being a property manager for your own investments. Thanks!
NEVER by yourself a job. Buy an INVESTMENT. A job means you are one place at one time.
I can't stand PM work. I am an investor myself as well as a commercial broker that owns my firm. I only transact and nothing else.
PM work is very low pay and high drama especially in residential. Investors constantly complain about poor PM work but yet they do not want to do the job themselves. Now if you buy in a certain really nice areas with certain types of tenants then you might not have much problem. Also know that your returns will be less the better places you buy in. Usually those markets investors are banking on rent growth and appreciation to carry them through.
Straight cash flow play areas you have to work for that yield keeping marginal and low income tenants on track. Generally about 10 units if you are good. I have seen some owners do 20 units but they are real stressed and constantly fixing issues.
Doing PM work for single family houses,versus 2 to 4 units, versus 50 units plus is all different. This doesn't even get into commercial assets. Some people do PM work and enjoy it. I love transacting and get paid way more for my time and no tenants for me.
My thinking was that getting this job might be a meta-investment in a sense, an investment on my planned investments.
I do not yet own any property, and I have no experience other than theoretical knowledge from books. Without going too deeply into my situation, I'll just say that being a commercial property manager (which in my area comes with a salary of 60-80k) would be an unfathomably large increase in income for me. I'm worried that on my current meager income getting a traditional mortgage for a cheaper property may be difficult (even with my decent credit). My thinking was that property management would give me more capitol to invest with, and help me to make smart decisions in investing. I would not want to do it forever, but I thought it might be a smart springboard to help me move toward my goal of full-time investing.
While I would love to be a broker and make more money for my time, I have not the slightest idea of how to get started in that field, nor do I have any connections in it like I do in property management. But I'm all ears.
Joel is right. PM work is a pain. It is a thankless job with very little pay. On the residential side, the phone calls always revolve around problems which you get paid to deal with. Depending on how you screen for tenants as well as screen for owners you represent can reduce the amount of problems but they will always be there.
My experience talking to new property managers is that they start with trying to be the low cost provider and that gets you owners that want to be cheap.
I was aiming more to work for a company, not be an individual property manager (aside from my own investments). In my area, the pay scale is a lot nicer than PM in other areas. I don't consider 60-80k to be "very little pay," though I understand many people here might.
Either way, it seems the consensus thus far is that PM work sucks. That isn't very daunting, considering my current job has long hours, is extremely tedious and detail oriented, and pays much much less. I'm still curious to hear opinions on whether I am improving my cash flow significantly by managing my own properties, and whether anyone finds themselves able to juggle investing in real estate and managing their properties simultaneously.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing