I guess it depends on whether or not you have enough properties to make it make sense, or you plan on taking on other owner's properties. I couldn't make it make financial sense for me whether I wanted to or not because I don't have enough properties to cover the costs. $50k+ annually is a big bite of cash flow unless they can offset their costs in other ways, i.e. in-house maintenance/repairs, managing other properties, tax & financial work, etc.
Originally posted by @Nate Bartow :
I have 95 units and have been told for around $15 an hour in NE ohio I can hire a manager in house. I'm currently paying about $2200 per month. 40 hours a week at $15 an hour would work out to $2400 a month
That doesn't include taxes, benefits, insurance costs, and $15/hr actually works out to $31,200 per year (2080 hours), which is $2,600 per month. It might make sense based on other things besides finances, but it's hard to see how you can pay less doing it this way.
It's more of an issue of the numbers and if you think the benefit justifies the difference in cost. If we follow JD's numbers ($2200/month is your current, with a projected cost of $2600 with in-house PM) then the difference in quality might be worth the switch. In-house will also scale better than hiring a company since you're getting all of their attention, and the price won't scale up as quickly either.
For us the issue has always been finding someone that can manage properties as well as we'd do it ourselves. If you're unsatisfied with the PM companies you've found, in-house gives you more control over the quality of service you'll have since you're the one overseeing it directly. If you plan on acquiring more units then there's more reason to go the in-house route, which is what I've preferred.
Another option might be to hire a maintenance person at a slightly hire rate and find out if it's possible for that person to also handle basic management using the property management system you have in place. That way you may get more for your money and your employee will probably not get bored.
In St. Louis at least the maintenance person would have to have a real estate license, which I've never seen personally. Not sure if the law is the same in Ohio or Virginia, but something to consider if you're going to go that route, Nate.
I'm guessing if he were to self-manage he could still have this employee prepare all the paperwork and send out notices in his name but he would still need to get the prepared eviction paperwork notarized himself and show up for court dates. Maybe with a special power of attorney it would be possible and legal to do it all? Or if the property is owned by an LLC or trust, maybe there is another way?
Very helpful comments here.
@Peter MacKercher I think you kind of hit the key points of my question which is, if my management company has say 1200 units and i am only 95 of those, I'm getting 10% of their time and the highish vacancies (i believe) may be a reflection of my PM company not having enough time to dedicate to my properties. Also, they have a 60 unit property a mile from mine that is relatively similar to my 60 unit and i wonder if mine is the first or 2nd property they show for potential renters in that area. Theyve had the other one under contract much longer.