Investor · Mission, TX · Member since 2017 · 220 posts · 135 votes
I've been on BP for a bit and I've noticed something. I love the landlord forums, but any time someone poses and issue there inevitably is someone(s) who bring up hiring a PM. Can we just agree that a PM is not a fix all and can in many cases make things worse with a high monthly fee? I don't really see the allure here. My point is this- just because there's an issue (as there always will be) does not mean someone is not fit to landlord.
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
9y
No. What we can agree on is if you can't afford a PM, you shouldn't buy the property. The PM is critical if you plan on owning a number of deals. What the PM does, a good one, is allow you to be a RREI...not a property babysitter. Your time is more valuable than anything. You can always recover lost money, but you can never get your time back...and in REI, time is truly money.
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
9y
No. What we can agree on is if you can't afford a PM, you shouldn't buy the property. The PM is critical if you plan on owning a number of deals. What the PM does, a good one, is allow you to be a RREI...not a property babysitter. Your time is more valuable than anything. You can always recover lost money, but you can never get your time back...and in REI, time is truly money.
The real problem is that the vast number of beginning investors never bother to learn their state landlord tenant codes before they invest.
This is my pet peeve with new investors...trying to operate a business requiring knowing the law without having the desire to learn.
They should never be allowed near tenants, they need a PM.
On the other hand responsible investors that learn the laws first I would strongly advise self managing. This should be mandatory for investors in order to train them on the business of being a good landlord. This will enable them to manage a PM when they reach that level of doors.
Well Andrew I don't agree at all. If it wasn't for a couple of damn good property managers I absolutely could not do what I do. I own properties in two locations over 2000 miles from home and thank my managers every time I talk to them for protecting my interests and putting up with day to day issues that I don't have too. That being said if the properties were in my back yard I would still have professional property managers so I could do what I do best and enjoy the most. I guess I look at it different than you, one of my biggest fears is something happening to either one of them and having to replace the quality partners in my operation that they have become.
I will admit when I had my first investment property at 24 that I did not realize all the legal aspects of RE and all the laws concerning what you can and what you cannot do. This forum here is an awesome place for those just starting out to learn. Someone does not know about property codes, they ask, we tell them to look and read. Someone asks about a repair, then someone who has remodeled 25 houses answers his question, then the next newbie has an insurance question and an Ins. agent responds. Vicious cycle of learning. Over time of that LL making mistakes he is gaining much knowledge and hopefully it turns to wisdom and eventually he is helping others.
Property mgmt has it place but not in every situation.
Sometimes I can read a post here thinking that idiot should not be a Landlord but where else is that newbie going to learn. Thanks BP!!
Real estate investing requires a certain set of service providers (RE agent, PM, lawyer, accountant, bookkeeper, contractor, sub contractors, handyman, etc). There are good and bad options for all service providers and All service providers require oversight and management.
For the most part with each of these services, you have the choice of whether or not to outsource the job or do it yourself. Depending on your strengths and experience, you may choose to do some of these services yourself but like most things in life, you are trading your time for cost of having someone else do it for you.
I think it really depends on your strengths, how you want to spend your time and much you want to scale your business.
Plenty of arm chair investors that don't know the difference between a shoe horn and shoe molding.
Regrettably the majority of tenant problems are created by incompetent landlords.
You have read the posts....my tenant regularly pays late. What should I do. Obvious answer is get a PM since you have no idea that you trained them to pay late.
Most of them actually believe the tenant is not late till the late fee grace period ends.
Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
9y
I hired a property manager after about 100 units because after a while I stoped being an investor and stated being a property manager myself.
Hard to grow and manage my business when I'm meeting with tenants. Doing showings. Putting in work requests. Leasing. Etc.
So yeah. I hired a PM because I didn't want to be a PM
Likewise I hired an ops manager a few years ago to deal with my property managers and other staff so I could continue to do what I do best which is be an investor.
I've been on BP for a bit and I've noticed something. I love the landlord forums, but any time someone poses and issue there inevitably is someone(s) who bring up hiring a PM. Can we just agree that a PM is not a fix all and can in many cases make things worse with a high monthly fee? I don't really see the allure here. My point is this- just because there's an issue (as there always will be) does not mean someone is not fit to landlord.
You are right, it's not a fix all. Nothing is ever a fix all. The #1 reason I use a PM is for time. I have a full time job like most folks and don't have the time to PM all my properties. The #2 reason I use one is because a PM can do all the things I can't do well. Market the property, rent it quickly, enforce late fees, and most importantly, treat it like the business it is without getting personally invested. Not all PM's can do these things, but the right one surely can.
Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
9y
If you want to put yourself in a position to have a quality PM I would recommend the following based on experience
Good PMs manage properties in good areas. I know it sounds simple, but good PMs do not deal with bad areas for the most part. Why? They don't have to. Want to increase your chances of having a good PM, buy in a good area.
The next most important thing you have to be able to do in order to put yourself into position to get a quality PM is to know what it takes to be a good PM. You are not going to get this knowledge by reading a guide online or asking the question in a forum. My recommendation would be to actually manage the property for a year or two so you know first hand what it takes to manage a property. Then from there you are much more informed on what makes a good/bad PM.
Also, established PMs I know don't like dealing with new property owners with no managing experience because they are often very unrealistic in their expectations. You know who really likes new investors? Bad PMs in bad areas because they suck them dry with fees.
Investor · Mission, TX · Member since 2017 · 220 posts · 135 votes
9y
Yeah I understand how PMs work I'm simply saying suggesting hiring one to someone with 1
Unit or even 10 seems silly. I think there are things you can learn to build a great foundation for managing your own units. I know at some point you have to, but around these forums it seems to be the answer when ANYONE is having a very fixable issue. And I'm sorry guys but poorly training your tenant is a fixable issue. Not easy, but fixable and a good lesson for a new investor to learn.
Rental Property Investor · Omaha, NE · Member since 2014 · 2k+ posts · 3k+ votes
9y
Andrew Acuna
I find it odd that you are so offended that other people think differently than you. Worry about your own business and don't worry about what I do with mine.
If your goal is to build a large real estate portfolio, then you will not do so successfully without PMs. Literally any business must have the potential of scalability in order to become successful. Without a scalable model, your business will be limited to the effort of the entrepreneur. One of the largest competencies of REI is scalability through other people's time (OPT), often times carried out through PMs.
If your goal is to own a smaller portfolio, then perhaps doing your own property management makes sense.
If you want to acquire medium to large scale apartment buildings, then you probably won't even get a loan from a commercial bank without proof of using a PM with a solid reputation. It's literally a part of the underwriting process.
Great question.. I spend a lot of time thinking about this one.
Investor · Great Barrington, MA · Member since 2015 · 153 posts · 39 votes
9y
I have a handyman that I pay the equivalent of 3% of monthly gross, and I use Buildium pro to self-manage my 14 units. I do all tenant relations and use Adobe sign for all documents. 80% of my tenants pay electronically and no one has been late. My apartment listings are done electronically on Buildium and syndicated to zillow trulia, hotpads, etc. My application is electronic, which in itself is a huge screening tool, and it also automatically manages criminal and credit checks. I was a bit worried when I was only getting a trickle of applications, but I realized that having someone fill out my electronic application--which doesn't let you leave critical fields blank--is in itself an excellent screening tool. I had one applicant say that he had all the information in a word document and could I cut and paste it in. I said no I had other applicants who weren't asking me to do their data entry. Nearly every applicant I had met the requirements and had excellent credit and clean backgrounds.
Investor · Mission, TX · Member since 2017 · 220 posts · 135 votes
9y
Anthony Gayden I find it just as interesting that you're worried about what I write on my forum. Worry about your own forums not mine. Point of fact, I'm not actually concerned about anyone's view on PMs I definitely think they are vital. However, the immediate reaction of many when someone has ONE issue is "well you must need a PM" I just don't think that's the case.
Of course scaling involves hiring a PM. It would be stupid not to, but I don't think it should be the first reaction when someone gets their first late payment and asks BP for help in how to do it.
Next time read the OP
Anthony Gayden I find it just as interesting that you're worried about what I write on my forum. Worry about your own forums not mine. Point of fact, I'm not actually concerned about anyone's view on PMs I definitely think they are vital. However, the immediate reaction of many when someone has ONE issue is "well you must need a PM" I just don't think that's the case.
Of course scaling involves hiring a PM. It would be stupid not to, but I don't think it should be the first reaction when someone gets their first late payment and asks BP for help in how to do it.
Next time read the OP
So you're not actually asking for other opinions, you're looking to make a statement...and for validation. I have no problem with that at all.
Investor · Mission, TX · Member since 2017 · 220 posts · 135 votes
9y
Joe Villeneuve I'm 100% on board with others opinions even if I don't agree. For example, your comments are received well. I appreciate the perspective of those further along. I simply stated I don't really see the need for PM early on, though it seems many on BP think the first time a landlord makes a mistake he or she should hire someone- I don't. It's perfectly fine for you to disagree with that. What I don't really care for is the implication that I'm somehow suggesting to anyone how they should do business.
Investor · Burbank, IL · Member since 2017 · 49 posts · 21 votes
9y
If you are starting out and only have a handful of properties it’s a good idea to PM yourself not only to save money, but to get to know the operations and PM logistics of the business you are growing.
In many successful businesses, the founders start off doing the heavy lifting and leg work themselves, but as their business grows they let go of responsibilities to people they trust. A good example is Walmart and how it was built by Sam Walton (the founder who did not want to give away his responsibilities). I would recommend reading Sam Walton: Made in America, it demonstrates how he build the largest retailer in the world by delegating responsibilities.
Make sure you screen your PM and it is someone you can trust. Take them out for lunch and see the kind of person they are.
Just remember the more units you have the more help you will need. If you do not bring in help you will limit your business.
Joe Villeneuve I'm 100% on board with others opinions even if I don't agree. For example, your comments are received well. I appreciate the perspective of those further along. I simply stated I don't really see the need for PM early on, though it seems many on BP think the first time a landlord makes a mistake he or she should hire someone- I don't. It's perfectly fine for you to disagree with that. What I don't really care for is the implication that I'm somehow suggesting to anyone how they should do business.
I follow you. Sometimes this medium makes it hard for people to interpret at their end what is meant at our end. Persistence, and a sense of humor, pays off.