I'm fairly new to bigger pockets and would like to start investing soon after graduation. It seems to me a great way to get some initial experience would be to become a property manager for a small, local investment company. I keep hearing/reading that no real estate investor ever claims to have a good property manager. It seems these problems arise from unloyal/lazy managers. With my work ethic I feel as though I could eliminate these problems. My question is, is there a need for more property managers? And if so how would you want to be approached by a property manager from an investors standpoint?
Hi @Adam Griffis ,
As a property manager, I am interested to see what response you get here. Unfortunately, the property management business has a tough reputation due to some bad eggs that take advantage of the trust and fiduciary relationship they are given. That said, part of the reason I entered the property management business is because I knew I could create value for my clients, and differentiate myself with professionalism.
Its a mixed bag. I had a stellar one in St. Louis, when we bought rentals down here in Atlanta in similar price ranges I fired 8 of them before I gave up and self managed. I think its more the quality of the tenant than the management company in that case, BIG difference in culture between the two cities in that price range.
I had rehab crews so really never turned anybody loose to make extra money by doing unnecessary repairs or over paying for them out of ignorance on your dime.
Great to hear from someone who is already in the business! How did you originally get connected with your clients? Meetings, cold calls, forums? I feel like a lot of the Property Management business is relationships?
My experience is that I have had realtors saying they are property managers also and then the management side suffers because it doesn't pay much money. They are busy trying to sell homes instead of managing properties.
@Adam Griffis , networking, cold calls, marketing. There is no way around the hard work. I jumped in with both feet and work on it every day.
@Gordon Cuffe - So true. PM is a full-time business, if you want to do it well.
@Dan DeMott hate to keep bothering you... but when you first started out did you do all repairs/fixups yourself?
You ever hear the story about the nurse who was so overworked that she spent only 2 minutes on each patient because she had so many patients to see? So she comes into a room, reads the order that says to change a fluid bag or whatever, does it, and leaves.
There are property managers who have so many clients that they just don't have enough time to properly deal with all of them.
Then there are also property managers who just don't CARE. They put any person into the property so they can get a tenant placement fee, and if the tenant damages the place, so what, it's not their money. They can charge 10% for any repairs and then charge another 1/2 month's rent to re-lease the place.
There are people who really don't want to be property managers and so therefore do the bare minimum at their job.
There are property managers who take money from the tenants and don't remit to the owners. They delay or make excuses or literally just run off with the money.
Those are just some examples of property managers who aren't so good. That's why there are so many complaints.
The property managers who are good, have systems and they CARE.
I can see that being a big problem. Also a huge reason why Property Managers get a bad reputation. Maybe there's room for some good ones then...
@Dan DeMott When you collect rent checks/cash do you have the checks made out to you and then you take your fees out before sending the total amount to the owner? Or are all the checks made out to owner, cash collected, and then sent to the owner along with a bill for your services?
I ask because I am about to sign on with a PM and I want to make it as smooth as possible, without checks and cash being sent back and forth so much, but just wanted to gather a PM perspective on how to handle that.
@Dawn Anastasi - I could not agree more. At the end of the day, real estate (and property management in particular) is a people business. The best property managers treat the properties as if they were their own and understand they need systems in place to maintain the level of service their clients deserve.
@Adam Griffis - I have a couple great handymen that I use for most repairs. They understand the quality of work I expect and also understand that I need them to be efficient and cost conscious. That said, I always have a trunk full of tools in case I can make a quick fix or repair when on site. If I'm managing a property, it's a reflection of me and my company.
@Dan DeMott that makes sense. How many clients/units did you have to manage before you could make it a full time job?
Its a money business , not a people business .
@Adam Griffis I'm a property manager, and I think all of my clients would have good things to say about me. There is the occasional grumbling over a repair bill, but I insist the owners I work with keep up their properties. I won't be a slumlord. That being said, my fees are very reasonable, and I try to stay on top of communication, which I think is the biggest complain amongst investors...they have no idea what's going on with their properties because their PMs won't return their calls
Being a good property manager involves doing a few things right:
1) Caring about who you put into the properties. Set screening criteria and follow them. Make sure the people you let into the property you would let into one of your own rentals. Make sure the place is attractive for tenants to want to rent and not want to leave.
2) Communicate with the owner at every step of the way. Tenant placement, maintenance/repairs, turnover.
3) Be timely on the payments to the owner.
4) Treat everyone with respect -- tenants, owners, vendors.
Looks like it's time to start getting my name out there...
The key to financial success in the property management game is numbers. You gotta love the numbers - and then your clients. The properties come a distant third and I do believe tenants are in there somewhere too .....
Good luck with your enterprise!
You are at a critical decision point...the management of the asset. Networking in your area will pay off. I prefer to see an owner/manager of the company. Find one that cares about people. If you take care of people (tenants and landlords) it's easier to make the money part work. Personal involvement of the owner is a good sign. You could request a list of refferal from the manager. Once selected, active participation on your part is required. Auto pilot does not work in this business. Stay involved in a reasonable way... would be my thoughts. Good luck!
@Darrell Shepherd Who was your PM in St. Louis?
I don't remember, it's been 8+ years since I had stuff there and my dad did most of our St. Louis stuff. I'll see if I've got it somewhere, though.
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