Rental Property Investor · Franklinville, NJ · Member since 2016 · 73 posts · 20 votes
Hey BP members,
Does anyone have any advice on hiring a property manager? I currently manage 16 doors myself, all within a 10 minute drive from each other. (I do everything). I looked into a few property management companies but they want 10% of the gross rent plus other fees to renew leases and file evictions, etc. On top of that, the realtor wants the first months rent when they find me a new tenant. Nothing against property managers for sure, if thats what people are paying, then God bless you :)
But I was thinking of hiring a part time employee (property manager). I could pay them a salary or hourly wage and I am thinking that would be less expensive and give me more control?
If anyone has ever done this, I'd love to hear your thoughts and how you went about it.
Here's what I'm thinking: If I hire an employee I can determine the job description. I'd like them to handle everything such as handling all phone calls, maintenance requests, posting and showing vacant properties, signing leases, filing evictions, etc,etc,etc...They could even work flexable hours.
I'd love to get some feedback from the BP community.
Rental Property Investor · Richmond, VA · Member since 2017 · 295 posts · 229 votes
9y
@Mark Vandzura I used to work for a property management company and I can say I saw with multiple properties and vendors that the property owner's best interest wasn't always the forethought of the property managers. There were multiple occasions where a property manager would go with a vendor that was friend/someone who took the PM out to lunch occasionally/etc, even though the prices were higher or the work was lower quality than the competitors. It's not the PM's money and they don't make more money by saving you money, so I definitely suggest self manage as long as you can! Unless you somehow can find a trusted PM (but good luck with that!).
Real Estate Broker · Cleveland, OH · Member since 2017 · 719 posts · 658 votes
7y
Originally posted by @Account Closed:
@Irina Belkofer is this a full time bookkeeper or part time? How many hours? Do you know how much they pay them? I’m considering hiring one, but no way I need a full timer yet
She's working for him full time, he's a CPA. But you can find a part time bookkeeper on Craigslist or by asking your friends - everybody knows somebody. I was paying $20/h cash when learning QB - now I do it myself.
I think if you talk to a bookkeeper, they will tell you how much it would cost....also, depends if you need to bill your Tenants back for water or not, call utilities companies etc, set up appointments for inspections....there are plenty of things the bookkeeper can do to free your time.
@Calvin Thomas you may not have had any issues but, not having a registered property manager in the county you are investing is illegal in some places. City of Buffalo would be one of the places on that list.
Can't speak for Buffalo, but we're not there yet (going to be in Rochester soon though). I can only speak for Albany, NY, Troy, NY, Bridgeport, CT, Philadelphia, PA, White Plains, NY, Yonkers, NY, New Rochelle, NY, New York, NY, Newark, NJ, Jersey City, NY and Chicago, IL. I've not had any issues, nor has our team of 47 employees. I've also been doing this since the late 70's, so I know my way around things to ensure all is legal and on the up and up. I will also add, we have an office in every county we work out of. So, we're local.
We've sold most of our properties in Troy aside from the waterfront and faired pretty well (mostly in The Hill neighborhood). We're building apts on the waterfront. We acquired the land a number of years back during the crash for cash. You can't miss them. Outside the waterfront, nothing of interest. Troy is in a bubble. Be careful.
Real Estate Broker · Long Island NY · Member since 2018 · 16 posts · 5 votes
7y
Highly recommend having a property manager if you are not in town. I own several properties in Albany, Troy, Schenectady and have a property manager. It runs much better and I think you make more $ as well as you have someone making sure you are getting paid monthly.
Property Manager · Castro Valley, CA · Member since 2016 · 212 posts · 110 votes
7y
@Mark Vandzura did you talk to a few managers about rates? I feel a full month leasing fee is a bit excessive, but leasing and screening is a bit of work and should come with fees / commissions.
10% is fairly normal for a small portfolio unless you are in a high priced area. You can negotiate lower rates as your portfolio gets larger.
I work in property management and I have out of state investments where I have a property manager that I really like. A property manager knows the market that they are in and those with a decent portfolio sees the market changes and what attracts renters more than a sole building owner.
A property manager doesn't do everything for you in a small portfolio like this, they just handle the day to day, paying bills, and resident interactions. They likely won't know your roof needs to be replaced until it is leaking, so all of the bigger capital projects are things you still need to decide on.
Just as all relationships, not everyone meshes together well and you want a manager that focuses on your class of property. A property manager that mainly handles B buildings will over care for a C property and a manager that mainly handles C may neglect care you want done on your B property.
The area I am in has a number of city requirements and tenant protections. A property manager is much more likely to know those laws. There are people that enjoy working on their properties and are better suited for self managing and should be self managing.
I would say to get a manger if you are purely doing it for the cost savings and find additional investments.
A part time employee could be a good solution since you know your properties. I would get a membership with a rental housing association and send that employee to classes (and do classes yourself) so that they don't create a problem accidentally for you. Make sure to look into the concerns that @Peter VanWesep pointed out. You wouldn't be able to hand over the property to a part time employee like you would a property manager.
Property Manager · CT · Member since 2014 · 687 posts · 329 votes
7y
Hi Mark,
If your long-term goal is to invest in more properties it is worth it to invest in a solid property manager.
Your time as an investor is infinitely better spent analyzing markets and deals. You want to move up the 80/20 leverage curve from technician to investor/entrepreneur. In Bridgeport, CT the investment is about 10% of rents collected. This frees you up from taking resident phone calls, coordinating maintenance, leasing vacancies, accounting P&L's, conducting inspections and making property payments to focus on higher leverage activities.
I am in the process of vetting a few PM companies now. The idea of hiring a W2 PM/personal assistant proved to be more trouble than its worth. It took me a while to find PM companies that I like but I believe I may have found a couple that might be a good fit. I've also acquired a few more doors which will give me some leverage in negotiating rates.
I liked the idea of hiring one local contractor for all maintenance but its seems that in my area its as hard to find that local contractor as it is to find a good PM company. The PM company that I talking with now has a nice list of licensed and insured vendors that they have vetted and built a relationship with. Time will tell.
Property Manager · Castro Valley, CA · Member since 2016 · 212 posts · 110 votes
7y
@Mark Vandzura leveraging the relationship of the property manager typically is one of the great things they bring to the table. It is still good to make some kind of contact with the contractor where you can.
The contractors I work with know our property owner's specific expectations and tailor their work to that. When something detailed is wanted, the owner will often speak directly to the contractor to avoid something being lost in transition between several parties.
The contractor will more likely resolve problems to keep a relationship with the property manager.