When managing your rental properties

Question

If my goal is to own 100 rental properties, when is it best to have a property management team step in? And does this make it easier to handle out of state investments as well?

I currently have 1 rental property as of now, working on an owner finance for my second, but I am trying to plan out my path so I can achieve my goal.

Dick Rosen · Answer

If your goal is to own 100 rental properties but it isn't your goal to be a management company, why wait. Get your PM picked out now, you may go through a couple on your way to 100 rentals so you might as well start now. Get your systems in place along the way rather than later.

Ned J. · Answer

Personal decision but to me the general answer is...... when you can easily make more $$ spending the time you are using to act as a PM, doing something else. In other words, if the time you spend acting as the PM is eating up so much time that you cant do other stuff to make $$....finding other deals etc....or its eating away from family and leisure time...its time to pass that job on to someone else.

For some its just about the stress of the PM job itself..... if you don't like that aspect at all, then do it at one property.

If you can manage 1/5/10/100 properties and it isn't consuming so much time that you cant progress with your overall plan in life, then why turn it over to someone else? If one property bogs you down then hire an outside PM

Steve Rozenberg · Answer

Erik, that is a tough question for anyone to answer. I say that coming as an investor that also created and own a pm company. I made a ton of bad decisions, purchased wrong properties and basically lost a ton of money. I can blame many things and people. But at the end of the day I did not take being an investor seriously. I never learned fair housing laws, Texas property code, tenant rights etc.. Nor did I take the time to understand that a rental property whether it is 1 or 50 homes is a business. You have laws /regulations, income  , expenses P & L statements etc.. I never created a business plan or did any homework. I was doomed to fail and get sued... which both . happened to me. I basically sucked as an investor, I took that and learned and created a PM company that is now very successful. My point is that if you take the time to learn and be successful with a business plan and homework you can do it yourself until your time is too valuable for this and it can be leveraged off. If you are not planning to create a successful business plan and learn all the laws I would suggest now is the time to hand it off. It only takes one law suit to lose everything you own. I am not trying to scare you but the reality is that there a lot of laws and landlords are the highest sued in real estate. Mainly because they do not ever learn those laws. Just my opinion

Jerel Ehlert · Answer

As you know by already having 1 rental property, properties need managing because they won't do it (profitably) themselves.  The answer may lie in the answer to a different question: When do you start to loose money managing your own properties?  (or, Where do you make money? managing property or acquiring property)

Anthony Dooley · Answer

@Erik Tarver I wouldn't worry about that until you are further along. Only you will know the answer. I manage some of mine that have long term tenants that always pay and others are managed by a property manager. At 100 properties, it almost makes sense for you to open your own property management company to manage your property.

Erik Tarver · Answer

@SteveRozenberg thanks ! I have been doing my homework for the past few months and reading up on laws, legal entities to protect assets etc. I have a plan on how I want to run my investments as a buisness, I just dont know of anyone that is in the real estate buisness, so any advice is appreciated.

When managing your rental properties

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