When do most investors decide to hire a property manager?

Question

When is self managing too much? When do most investors decide to turn over property management to a company? What are some success stories about turning over properties from self management to property managers?

Dustin Beam · Answer

As said, that's probably a tough question to ask. I can only speak from my perspective, but I want/like control and am always leary of people that control my money. But I also value my time....time is what I want anyway. Money made from REI just happens to be the way I intend to have more of it to do what I want.

So for me, if I can, it will go something like this:

1. Continue to accumulate property until I can semi-retire or fully retire from my cubical environment.

2. Once I've done that, I have more time to manage so I continue to accumulate property until...

3. Five percent of my gross rents are enough to pay my own employee that I train to manage all my apartments. Better yet, potentially hire two people so I have some redundancy should one of them quit.

There are some potential pit falls with that plan (mainly there's a chance that 5% isn't enough to match the work involved w/ X number of doors. But that's my plan, only at 11 doors right now so managing them isn't always ideal but is doable with my current job.

JD Martin · Answer

Too many variables to really put an answer on this. There are LLs on this board a la @Steve Vaughan that successfully self manage a lot of units, and there are LLs on this board that screw up a single unit. It is really dependent on the individual, their KSAs (knowledge, skills, abilities), their interest level, their geographic proximity, etc. Some people want strictly hands-off and are fine with less return in exchange for doing nothing. Others want to maximize their return and don't mind investing a few hours into their investments in order to make it happen.

Most people will find long-distance self-management difficult, and that's a natural for putting a property into PM. If you're too soft to deal with tenants, or unskilled at marketing your property, then it doesn't matter if you live next door to the property - you should probably put it under PM. Personally, I prefer to manage all my properties because a) no one cares about them more than me, b) there's no PMs in my town worth a crap anyway, c) my properties are fully renovated and rent so fast that PMs would do virtually no work for their pay anyway, d) I'm a control freak, e) I make more money.