As a fellow investor and owner of property management company, I am not sure I agree with the above statement. Only thing you are not taking into account is the fact that you are running a business with Profit / Loss, Income / Expenses, and Laws. You have the Fair Housing Laws, Discrimination Law, Eviction Law, Fair Credit Reporting Act, California Property Code law ( I am assuming California has this).
Remember the landlord is the highest sued in real estate mainly because they do not take the time to learn these laws in a very litigious society. If you are willing to take it seriously and educate yourself on these laws then yes I would agree you could manage them yourself. But the bigger question is how much free time do you have and where do you place that value. I personally did not get involved in investing to have a second or third job just to have headache and stress because I didn't know what I was doing.
I agree that yes there are some horrible property management companies out there. But there are also some good ones as well. You have to make sure you goals align with theirs and their management style. You have to ask the hard questions first and set the property expectations with not only a management company, but a vendor, a tenant, or any business venture.. most people do not think too much about the running of the business till after the fact, which is why so many people fail at this.
Below are some basic questions for property management companies.
I would look up NARPM and start with them..Below are some questions I would think would be a good starting point for you to see who really treats their company like a business or a hobby.
Questions to Ask prospective management companies
Eric, just manage them yourself. You can stay in control and keep all the profits. PMs are just so often a disaster as far as destroying profits.
Get this book:
http://store.nolo.com/products/the-california-land...
It was my bible. Also includes all the forms and contracts you could ever need in CA.
Use month to month agreements, so if a tenant is a problem, you can kick them out.
Do really good screening for good tenants. One way to do that, is to use a service like SmartMove. I have never used it, and did my own screening decisions along with getting credit and other reports, but what's great about using a service like SmartMove, is that they use statistics to make the decision for you, so you can't be snowed by con artists. With time, you might want to just do your own complete screenings, but you also can avoid any discrimination issues by just always going by the service's decision - takes the decision out of your hands.
Property managers never only cost the 10% per month they advertise. They can't make money that way. They make money when there are problems, therefore, they will not help you avoid them. It's in their best financial interest to find you bad tenants. Sad, but true.
Since you live right in the area you want to invest in, just manage them yourself. If you screen really well, the tenants you get shouldn't be really high-maintenance.
And what you can do, which we did, was unless something was an emergency, all maintenance was done on Saturdays. The owner I worked for did most of his own maintenance, and he came every Saturday. But, even if you don't do your own maintenance, you can deal with most things over the phone, and schedule things in a way that is fairly simple, by means of telephone calls and texts, etc.
As a fellow investor and owner of property management company, I am not sure I agree with the above statement. Only thing you are not taking into account is the fact that you are running a business with Profit / Loss, Income / Expenses, and Laws. You have the Fair Housing Laws, Discrimination Law, Eviction Law, Fair Credit Reporting Act, California Property Code law ( I am assuming California has this).
Remember the landlord is the highest sued in real estate mainly because they do not take the time to learn these laws in a very litigious society. If you are willing to take it seriously and educate yourself on these laws then yes I would agree you could manage them yourself. But the bigger question is how much free time do you have and where do you place that value. I personally did not get involved in investing to have a second or third job just to have headache and stress because I didn't know what I was doing.
I agree that yes there are some horrible property management companies out there. But there are also some good ones as well. You have to make sure you goals align with theirs and their management style. You have to ask the hard questions first and set the property expectations with not only a management company, but a vendor, a tenant, or any business venture.. most people do not think too much about the running of the business till after the fact, which is why so many people fail at this.
Below are some basic questions for property management companies.
I would look up NARPM and start with them..Below are some questions I would think would be a good starting point for you to see who really treats their company like a business or a hobby.
Questions to Ask prospective management companies
Steve, I'm sure you're a great PM.
But, I have to disagree with the idea that a landlord has to know all of the codes and laws that relate to real estate, in order to manage their own properties.
We all learn just enough law regarding driving on roadways to do so in a legal manner, without knowing every single code on the books regarding traffic control in the state or federal systems. There is no need to be afraid of learning the legal basics of being a landlord.
The Nolo book makes it very simple. Just follow the basic guidelines given. You don't need to pass a bar exam to know, for instance, that you simply can't discriminate for the short list of protected classes. Learning this is enough, and doesn't require you to learn every code for fair housing. You read this simply and well-written book, and refer to it as often as necessary.
And the book includes really easy to understand forms and contracts that already include all of the necessary clauses required by CA law, written by lawyers who know the laws, and wrote the contracts for you - so you don't need to learn all of the relevant codes or know how to write your own contracts.
A little time invested in learning the business a person wants to be in, is time well spent. Even if someone ends up deciding they want to hire a manager - they should know enough to be able to oversee that person's work.