planning on purchasing multi family property (2-4) units soon but not sure if I have to keep property management company?! Is that something I can cancel after purchase or i have to keep it? If I don’t keep it is there a fee? Because technically most of the time tenants are found through management company so I’m not sure how it works.
Property Manager · Gilbert, AZ · Member since 2009 · 1k+ posts · 451 votes
6y
A property manager is hired and contracted with the property owner. When that Owner sells the property to you, the Managers contract is Null and Void. That manager may be a good resource for you but if you wanted to keep them you would have to contract with them yourself, they do not follow the property.
Rental Property Investor · Minneapolis, MN · Member since 2020 · 540 posts · 285 votes
6y
@Junior Shay
Consult the purchase contract but 99% no and if you are required it would be disclosed in the Seller Disclosure. You can self-manage but be ready for the old tenants to potentially try to “get ya” or say something was promised (improvement Reno) or a “no rent increase” was promised. Some of these folks are professional tenants and will look to work over a new landlord.
Rental Property Investor · Woodbury, MN · Member since 2018 · 299 posts · 299 votes
6y
You should check with your local ordinances and your lender. Some lenders will require professional management on larger properties when it gets into the commercial realm but fairly certain that won't be the case for a residential property.
You pointed out that most vacancies are filled through a management company but how are the management companies finding the tenants. You can post on craigslist the same as them, you can post on Zillow, apartments.com and many of the other three dozen rental sites. Self-managing is more work but it's also more money in your pocket. You are going to need to be very thorough on your lease audit during your due diligence so you know what is happening and what you can expect after you take over.
Also, during your due diligence period you should be reviewing all contracts that are in place. This should include the contract with the management company. If you have any questions you should consult with your attorney.
Property Manager · Gilbert, AZ · Member since 2009 · 1k+ posts · 451 votes
6y
A property manager is hired and contracted with the property owner. When that Owner sells the property to you, the Managers contract is Null and Void. That manager may be a good resource for you but if you wanted to keep them you would have to contract with them yourself, they do not follow the property.