Rental Property Investor · Baltimore, MD · Member since 2020 · 223 posts · 89 votes
I have made an offer on a property in the Belair-Edison area of Baltimore, which I will rent once closed. A couple things I need the communities help with. I am planning to use a listing agent to market the property to rent and vet tenants, once tenants are in place I would pass on to a property management to collect rent, handle evictions as needed, maintain books, take maintenance calls and schedule routine maintenance. However, for the maintenance calls and routine maintenance I would have the PM call me and I will have these calls taken care by my contractors/handyman. Will property management facilitate I handling the maintenance of the property and they just take the calls and make routine maintenance schedule?
Investor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes
6y
My 2 cents would be that you don't need a property manager or a listing agent. My wife and I manage 40 properties with very little daily effort. To the point that we both worked full time corporate jobs and managed to keep those jobs until we had 20+ properties we were dealing with. You can do A LOT of managing by text while working a regular job. You are an hour from your upcoming rental. Zillow is literally all you need to being able to find a renter. We use Rentec Direct to collect our rent, market our properties (through Zillow), have tenants contact us if repairs are needed, and background screen our tenants - plus track all our expenses, etc. It costs about $4 a month per property once you have several on board. Might be a little higher than that for just your first one.
Why would you pay a PM 8%-10% to then handle the calls yourself? You are already going to be doing most of the heavy lifting. You just need a system (like Rentec Direct) or others to help you be efficient. Being only an hour away from your property, you would really only have to be traveling there when it turns over to show it to a new tenant. My vote is to keep your money, do it yourself.
Rental Property Investor · Dayton, OH · Member since 2019 · 293 posts · 440 votes
6y
@Tyrone Marson I wish I would have seen this earlier, so I’m sorry for jumping in late, but lots of good advice from others. A few things that caught my attention though I wanted to give my two cents on.
I own and self manage a few hundred doors in Ohio while working a full time job. I also am a licensed realtor. Transparency, my boss is a partner on some of those and I manage a lot of things for him including his real estate, so I have a flexible job and great boss! However, I focus on C properties and often we buy distressed multi-family in challenging neighborhoods which brings challenging tenants. I use Buildium software and I manage every aspect of my business from my IPad! Best investment I’ve ever made! Hands down!
My advice, manage your own stuff! The #1 reason I’m able to buy multi-family at deep discounts and cash refi out at 6 months very successfully is due to poor property management companies. PM companies typically do not and will not treat your property like theirs and as long as they don’t drop you below your reserve, they can be a little loose with spending. Not all of them, but a large majority. If your using the Brrrrr, you need your numbers to look good which typically means forcing your appreciation through rent increases, reducing expenses, reducing vacancy etc. in your first 6 months as a new investor that 8-10% pm charges you can take a huge toll on your re-fi.
The one thing that caught my eye is when you said you didn’t want them to know you are the owner! I know some friends that believe in that, but I personally do not and here’s why. I run less than 5% vacancy on a few hundred doors. It’s because my tenants refer so many people to me I barely ever market units for rents and I have very few move outs. I have waiting lists currently. This is because my renters know that I am the owner and the manager and I treat them with respect. I stop by at odd hours and after hours just so they see my face and know I’m actively involved. If something is broke we fix it, if they have an issue I listen, if they get out of line I have real talk with them. I am fair but firm with them always! They know if I say something, it’s exactly what is meant and not distorted by a PM. Don’t be afraid to be the owner, there are a lot of positives and I truly believe tenants are better to your stuff when there is a personal component. At Christmas, my wife and I buy toys for properties with kids, I give the kids small $ amounts for A’s on their report cards, I randomly pop up with ice pops or popsicles on hot days, I’ll crossover a few kids on the court or just chat with tenants while I’m at properties. My number 1 rule, Always......be good to tenants and treat each how you would want a landlord treating your mom, dad, kid, brother or sister even if it means you don’t make a few extra bucks. The rewards for being good to people will be infinite!
Build your team! If you don’t have time to show units or lease your own units, use someone you trust to do this for you. I DO NOT KNOW YOUR MANAGEMENT LAWS THERE, but in Ohio as long as your owner in a property, you can do all of it yourself and I’m sure your law is similar, but make sure you understand it exactly. The reason is, you can be creative with “ownership” and what that means if you have a friend or family member you trust to do leasing instead of paying higher amounts to an agent or to a PM. I would be happy to share a few creative ideas on that. From there, have your maintenance man ready to roll! Find you a solid attorney to handle your needs including evictions!
I wish you all the luck in the world and PM if you need anything at all or just want to talk through some things
I also tell any new landlords to spend at least one day observing the cases at the local rent court. It will really open your eyes to some bad tenants as well as really bad landlords. The learning experience is well worth the time you spend at the court.
This is really good advice. I'll make sure to check this out.
@Tyrone I'm also a newbie landlord but I plan to self manage. My suggestion would be to list all the activities you would expect your PM to handle for you versus what you would expect to handle yourself. And then decide if that justifies an ongoing monthly charge of around 10% of your gross rent.
Brooklyn, NY · Member since 2016 · 61 posts · 13 votes
6y
In challenging neighborhoods its probably better that the tenant doesn't know the owner but in better stable neighborhoods its probably a good idea to develop a direct relationship with your tenants
If you are coordinating repairs with handymen you are already doing a large portion of what a Property Manager would do and might as well self manage. But if you insist on using a property manager you might as well let them handle the rental listing as well.