I am going to take a look at a 4 plex in the next few days. I found out that the building is partially occupied and one of the units is rented out by a property manager. I'm not sure how exactly this works. I've heard of hiring property management companies that you pay a percentage of the rent but how exactly is a live in property manager compensated. This will be my first property and I'm buying with an FHA loan. So any advice is appreciated.
Usually a live in property manager gets a discount on the rent, they are generally not nearly as professional as a company and are usually better with repairs than they are with administrative work. It can be written in their lease that they get a discount but this can be changed when their lease comes up for renewal.
Thanks for the response! I like the idea of having someone else manage the property as I am not very "handy" myself. Would you say that it would be better to have a live in property manager as opposed to a property management company?
I prefer a company especially in my tenant friendly state, I can fire my company basically whenever I want if they screw up, this is usually not the case with a live in manager. Also a company will have experience dealing with evictions and posting of notices and may recommend when it is time to raise the rent, they will also handle repairs, with professional contractors most of the time (you still have to pay for the repair). As mentioned before the live in manager may not be experienced in the areas of property management that are needed when things go wrong (people not paying).
Hey @Aman Khan and welcome to BP! Just a heads up when wanting to respond to someone type the "@" button and spell their name and then tag them it's much easier for them to see and so people will know who you are speaking to. I would be very careful with this situation, some onsite managers are not the best and are very cushy with the tenants and aren't strict like they should be. Like most people they have their own systems and ways of doing things and when you come in you will obviously be changing that, and they may see you as a threat to their control or management. Most of the horror stories on BP come from inheriting tenants and even though they are an onsite manager, they are still a tenant. If they aren't a good, honest and hard working person evicting them or getting them to leave is that much harder since they are the manager, and know more than the typical tenant. Just as an example my company took over a 52 unit here in San Antonio and there was an onsite manager that we inherited, she was very trashy and rude so we quickly realized we needed to get rid of her. However when we were doing the eviction process she made our life a living hell by bringing up unpaid invoices, calling the health department for things, and just doing anything she could to prevent this or slow down the eviction. The ironic thing is that these were all consequences of her horrible management, but now that my company owns the property we are accountable for that. Just be careful and do your due diligence not only on the property but also on the people there. It's much better to start fresh and get your own tenants then to inherit previous ones because you don't know their qualifications, relationship with the previous land lord, or their attitude towards the property. If you have to inherit tenants make sure to interview them and ask them what they like and don't like about the property, also be sure to check their lease(if they have one) and see when it ends just in case.... Good luck!
Thanks for the heads up @Michael Guzik and I really appreciate the insight!
I appreciate your input @Aaron Klatt !
To make tagging work properly type the @ and the first few letters of the name and then select the name from the drop-down menu. Luckily I come back to my older posts sometimes :)
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