Rental Property Investor · Raleigh, NC · Member since 2018 · 179 posts · 192 votes
8y
Agree. No one manages your money better than you. There's also no better way to learn the business from the inside out. Plus it can be a great source of deal flow!
Property Manager · Jacksonville, FL · Member since 2018 · 514 posts · 470 votes
8y
@Brian Beadle I disagree. Just because an investor owns a large multifamily does not mean that 1) they manage it themselves or 2) if they do manage it themselves that they actually enjoy this and want to handle others' properties. In my case I do enjoy managing my own properties. I only have 2 so it's not like having a large multifamily but I would like to have my own property management company someday. We will see if that changes as I acquire more units.
Rental Property Investor · Raleigh, NC · Member since 2018 · 179 posts · 192 votes
8y
Agree. No one manages your money better than you. There's also no better way to learn the business from the inside out. Plus it can be a great source of deal flow!
@Brian Beadle I disagree. Just because an investor owns a large multifamily does not mean that 1) they manage it themselves or 2) if they do manage it themselves that they actually enjoy this and want to handle others' properties. In my case I do enjoy managing my own properties. I only have 2 so it's not like having a large multifamily but I would like to have my own property management company someday. We will see if that changes as I acquire more units.
Good points Elenis, but I am not necessarily referring to 'self-management.' The property owner would own the management company in a separate entity. He/she would still perform the same functions as if the property were managed by a third party company, but instead, the property would be managed by a company he/she owns.
It seems to me that if you have a strong understanding of RE investing and its principals, it would not be difficult to build a team that will operate under your direction. Why pay someone else the 5-10% when you can build a business that can do this for you.
Agree. No one manages your money better than you. There's also no better way to learn the business from the inside out. Plus it can be a great source of deal flow!
I do not disagree David. The only downfall of this would be the shift from managing properties to managing people. I feel many HNW investors buy properties instead of business because it is much easier to manage properties than people. Your tudor style four-unit on the quiet cul-de-sac isn't going to drink on the job, steal toilet paper and embezzle quarters from the washing machines...
Rental Property Investor · Raleigh, NC · Member since 2018 · 179 posts · 192 votes
8y
@Brian Beadle at the end of the day, as landlords aren't we already managing people? I wish my tenants gave me as little trouble as my properties! :-) You're right that "your Tudor style four-unit on the quiet cul-de-sac isn't going to drink on the job, steal toilet paper and embezzle quarters from the washing machines . . .", but my tenants certainly are! All the best.
Agree. No one manages your money better than you. There's also no better way to learn the business from the inside out. Plus it can be a great source of deal flow!
I do not disagree David. The only downfall of this would be the shift from managing properties to managing people. I feel many HNW investors buy properties instead of business because it is much easier to manage properties than people. Your tudor style four-unit on the quiet cul-de-sac isn't going to drink on the job, steal toilet paper and embezzle quarters from the washing machines...
HEY! Don't you tell me what my property is or is not going to drink on the job. Sometimes you just need a cold one. (pfft) Judgy much?
@Brian Beadle at the end of the day, as landlords aren't we already managing people? I wish my tenants gave me as little trouble as my properties! :-) You're right that "your Tudor style four-unit on the quiet cul-de-sac isn't going to drink on the job, steal toilet paper and embezzle quarters from the washing machines . . .", but my tenants certainly are! All the best.
Haha, yes. No disagreements there David. If you have a talented PM company in place, there shouldn't be too terribly much interaction with your tenants. All the more argument for developing your own PM company. Am I wrong?
Property Manager · Jacksonville, FL · Member since 2018 · 514 posts · 470 votes
8y
@Brian Beadle Got it. I was thinking you meant starting a property management company to manage others’ properties, not just your own. But again, many investors don’t want to deal with managing their own properties. I do manage my own and totally agree with your points. But not everyone likes to do this. Just saying :)
i think if investors BEFORE they bought properties that require medium to heavy managment they should definetly sort out their style of management and source
from what i reading is people are basically tired of bad tenants and other minor thing such as up keep.
but if u did a bit of footwork and got yourself some good solid tenants that are trustworthy and would treat your property nice i dont see a problem.. having a residental rent collector and your good tenants and your own contracted mainence is pretty much it..good footwork is always valuable all the time ..people need rental homes just as much as people need owned homes
Warsaw, IN · Member since 2018 · 33 posts · 8 votes
8y
I agree with your first post @Brian Beadle. It all depends on the the investor though. Personally, I plan to do this in the future since I love the entrepreneurial aspect of real estate investing. Managing my own properties and building systems/processes to become the best hands on property manager will help me jump into creating my management company to where I'll be able to offer the same quality service to other investors who don't want that responsibility.
Involved In Real Estate · Omaha, NE · Member since 2012 · 140 posts · 34 votes
8y
@Diego Lopez Agreed. I understand that property management is not the most lucrative business in the world, but I feel it makes sense that if I have a certain way I would like my properties to be managed, why not build a business around around those pillars. If I don't, I feel like I would end up managing my management company which may take just as much time as oversing my own PM company.
Residential Real Estate Broker · Cartersville, GA · Member since 2015 · 575 posts · 581 votes
8y
Be careful here; as entrepreneurs we all suffer from the fact we see opportunity on every corner. I actually own a property management company and I don't have everything I want in my software so I thought "why don't I just make my own software?"...then last week i couldn't get anyone to cut grass so I thought "why don't I just start my own landscaping business?... and the list goes on and on.
Investor · Indianapolis, IN · Member since 2017 · 145 posts · 158 votes
8y
We (family business) manage our own portfolio (40+ doors) and once we get to a certain size...not sure yet what that size is...we will probably do some hiring and create a PM company to manage for others as well.
I think it makes a lot of sense to solidify your PM skills as you build up your own portfolio, and then take those skills to the market as well.
Investor · Prairieville, LA · Member since 2015 · 311 posts · 424 votes
8y
@Brian Beadle
In my area, it is difficult to find a good PM. As a result of this, most investors with more than 75 units go this route just for the sake of having competent management of their properties. They tend to to just manage their own ONLY. I will probably do the same as well.
However, why would you want to enter in such a low margin business? I guess that is a personal preference. Many RE companies do PM as a loss leader because they work with investors. Therefore, if I were to do a PM company for hire, I would have my own brokerage. I would estimate that 30 percent of investors would like to expand by buying more. Then maybe 10 percent are willing to sell. Therefore, you would have 40 percent of potential sales/buy clients with potential of double ending commissions by representing both in a deal.
Rental Property Investor · Kansas City, MO · Member since 2018 · 27 posts · 15 votes
8y
I do own and manage my own property management company. However, this doesn't mean it makes sense for everyone. I am now investing, flipping, renting, and selling full time so I do have the time to do this. To me, it's all about generating additional streams of income. I only charge 8% to my buyers, but it still provides more than I had before, and it provides a service to my clients.
But for more passive investors, it doesn't always make sense. They wouldn't necessarily have the time, or would rely on their Turnkey provider for manage it for them.