Anyone go from using a Prop Manager to self-manage during a lease

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Anyone go from using a Prop Manager to self-manage during a lease

Pranitha Shandi
Homeowner 路 Member since 2020 路 30 posts 路 2 votes

I currently manage a property myself (I live close to this). Another property that I own is being currently managed by a property manager ($200 monthly fees). I am not happy with my Property Manager and plan to take it upon myself. My contract with Prop Management is a 30 day heads up to discontinue the Management service. There is still 5 more months left on the lease of current tenants. The current tenants seem to be nice and no complains so far. I will inherit about 4 months of current tenant (hope he renews the lease 馃槉). 

From the peers here, I would like to know what are the items that I need to be wary of, taking it on myself. Would you recommend waiting until the end of current lease? 

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Isaac S.
Member since 2018 路 563 posts 路 562 votes
6y

I have only self managed multi family in a 90 year old building. I have very extensive maintenance but, I am in hot market so turnovers are fast.

That being said...it has been my experience that their are two types of investors, those that are great at the financing/accounting/deals and those that are great at the maintenance/day-to-day operation.

Even the numbers-investors are still required to manage the management company, so, it can frequently be just a bit more work to do all the management yourself and get substantially better return, as long as you are handy or have a good reliable handyperson.

Good luck!

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  • Pranitha Shandi
    OP
    Homeowner 路 Member since 2020 路 30 posts 路 2 votes
    6y

    Bump!!!

    0Reply
  • Isaac S.
    Member since 2018 路 563 posts 路 562 votes
    6y

    I have only self managed multi family in a 90 year old building. I have very extensive maintenance but, I am in hot market so turnovers are fast.

    That being said...it has been my experience that their are two types of investors, those that are great at the financing/accounting/deals and those that are great at the maintenance/day-to-day operation.

    Even the numbers-investors are still required to manage the management company, so, it can frequently be just a bit more work to do all the management yourself and get substantially better return, as long as you are handy or have a good reliable handyperson.

    Good luck!

    1Reply
  • Calvin OzanickBusiness Member
    Property Manager 路 Janesville, WI 路 Member since 2017 路 708 posts 路 297 votes
    6y

    I would tend to say you should look around for a new manager. Unless you either have experience or really want to manage yourself, I would just say let a professional do it. This eliminates the headaches, while also eliminating the problem you are running into. 

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    1Reply
  • Pranitha Shandi
    OP
    Homeowner 路 Member since 2020 路 30 posts 路 2 votes
    6y

    Thanks Isaac.  Hoping the transition during an ongoing Lease does not cause any hiccups to the tenant or me (fumbles)

    1Reply
  • Pranitha Shandi
    OP
    Homeowner 路 Member since 2020 路 30 posts 路 2 votes
    6y
    Originally posted by @Calvin Ozanick:

    I would tend to say you should look around for a new manager. Unless you either have experience or really want to manage yourself, I would just say let a professional do it. This eliminates the headaches, while also eliminating the problem you are running into. 

    Thanks Calvin for your response.  I have experience managing one other property.  The property that I am trying to take over is 2005 built home where I stayed for several years and know the area/handymen... so far the current tenants have not had any maintenance requests... Those give me the confidence of doing it myself.  

    I would like to hear from you any possible headaches that I may incur taking over midway throught the Lease.

    0Reply
  • Isaac S.
    Member since 2018 路 563 posts 路 562 votes
    6y
    Originally posted by @Pranitha Shandi:

    Thanks Isaac.  Hoping the transition during an ongoing Lease does not cause any hiccups to the tenant or me (fumbles)

    If the asset is in good shape and they pay rent, only problems would be maintenance. If they don't pay, a friendly phone call reminder, followed by the formal type of demand letter they use in your market(here it's called a 3-day notice to pay or quit).

    Just make sure to fix things that are broken and get the rent payments, pretty easy stuff. The thing you should read up on is Fair Housing Laws and just make sure you don't illegally discriminate.

    Even you just do it for a bit, and get some experience with management, it will help you to better manage the managers, unless you are lucky enough to get a top notch manager that is reasonably priced and not overcharging you for maintenance.

    Best of luck!

    1Reply
  • Pranitha Shandi
    OP
    Homeowner 路 Member since 2020 路 30 posts 路 2 votes
    6y

    Thanks @Isaac S.

    0Reply
  • Kenny Dahill
    Investor 路 Tempe, AZ 路 Member since 2018 路 1k+ posts 路 731 votes
    6y

    @Pranitha Shandi, read your Management Agreement.  Although it says 30-day notice, you probably have to pay them their remaining dues upon termination.  It's unfair but a detail that is commonly missed when signing agreements.

    Taking over management is not a big deal.  PM will need to provide all paperwork and reports.  In fact, I would casually ask them for an updated set before providing the termination notice.

    Upon termination, reach out to the tenants and explain you will be taking over the management.  Have a system in place for rent collection.  It can be a PM Software, Zelle, Venmo, etc.  Doesn't matter, only that they know NOT to pay the old PM.

    Buy your tenants a gift card for the transition hassle.  $25 is a kind offer that every tenant appreciates.  Use that as an opportunity to view the property as well.

    At this point, wait for maintenance requests and confirm rent is paid each month.  It's pretty simple.

    1Reply
  • Pranitha Shandi
    OP
    Homeowner 路 Member since 2020 路 30 posts 路 2 votes
    6y

    thanks @Kenny Dahill

    0Reply
  • Bill B.
    Investor 路 Las Vegas, NV 路 Member since 2013 路 8k+ posts 路 10k+ votes
    6y

    How much is the rent? I only ask because I took over my only out of state because it was a $3,000/mo property costing me $250/mo in fees and I had already dealt with the tenant directly while scheduling a refi appraisal. 

    On the other hand, my instate properties rent for $1200-$1800/mo at 8% in fees it鈥檚 $100-$144/mo well spent. 

    So if your rent is under $1500/mo I鈥檇 look around and see fi you can鈥檛 get it done for $120/mo. Save 1/2 the money with no extra work on your part. For me the finding the tennant is the most valuable service PM鈥檚 provide, if the current tennant moves out in 4 months you may find ti easy or you may agree. 

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