Transitioning from property management company to self managed
Rental Property Investor · Temple, TX · Member since 2018 · 19 posts · 9 votes
Transitioning from property management company to self managed
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Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
5y"At 2AM when a hot water tank bursts, who is going to answer the call and drive over there to stop the damage from getting worse?"
12 years and 23 SFHs, I've never had a 2AM call. Certainly doesn't mean it can't happen but it is surely overly dramatic. No way I am paying someone $2,400 a month for 5 hours work. I get a maintenance call, I have the resident contact a trusted contractor. I've found self PM to chiefly be about good tenant selection and efficient, repeatable processes.
Not to mention an outsourced PM will place the first person that can fog a mirror in your property. Later, you find out they used your living room to change their Harley oil.
33 Replies
- 5yCameron TopePro MemberProperty Manager · Katy, TX · Member since 2015 · 1k+ posts · 1k+ votes
Maile,
Congrats on moving and taking the steps to create more freedom for you and your family!
There are a lot of great points covered throughout this thread. I think the most important thing is that you treat your 12 units as a business, which requires systems and processes.
12 units isn't going to keep you both busy full time so you may think you can wing it. Don't!
Every time you do something, take 5-10 minutes and write a simple process or checklist in Google Drive (you can always add more details later if needed).
A couple other pointers:
- Develop robust tenant qualifications
- Tell the tenants you're the PM
- Use PM software (we use Buildium)
- Build a few deep relationships with solid contractors
- Call your tenants every month or two and check up on them - it goes a long way!
Congrats again for making the move and best of luck!
- Member since 2019 · 448 posts · 306 votes5y
@Maile Clancy
We usually hear people going from self manage to PM, not the other way around!!!!!!!!
If you feel comfortable i say go for it. I use a spreadsheet and cozy and QB online (about to swap to stessa) and it doesnt take much time to handle everything.
- 5yDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Everyone thinks they can reinvent the wheel and figure out a way around being penny-wise and dollar-foolish.
To rephrase what @Peter T. implied above, why would you want to do a $20/hour job (property management) when you could be investing that time in other ventures that make you $100+/hour?
Now, if you're serious about DIY Landlording, you should be reading everything here on BP you can about being a landlord. That includes researching numerous software packages to handle advertising, applicant screening, accepting online rent payments, creating lease ledgers, tracking income & expenses, monthly bank & account reconciliations, eviction processes, and more.Are you going to use your personal cell phones and email addresses, as well as your home address - so every pissed off tenant can find you and show up whenever they want?
Logical Property Management4.9458 Reviews - Rental Property Investor · Temple, TX · Member since 2018 · 19 posts · 9 votes5y
@Terrell Garren thank you I am in alignment with you for sure. We’ve had a couple PM and I feel like they just aren’t worth the money we are spending every month.
- Virginia Beach, VA · Member since 2016 · 46 posts · 33 votes5y
Don't let the dramatic replies on here from actual property managers scare you. You guys can do it. Granted I only self manage 7 doors, but I don't work 50 hours a week (including my full time job). It's great that your husband is handy, so he can be your general maintenance person. In addition, and as someone mentioned above, have good plumber and HVAC techs on hand as these are your more specialized and time-sensitive repairs.
Most importantly, learn to screen. The first thing to know is how to look up Texas public court records. If someone wants to apply and you see an eviction, you can simply delete the inquiry. I've had good luck with only scrutinizing Income to Rent ratios and no prior evictions. I don't care about credit. My best and most long-term tenants have had luckluster credit, which likely keeps them from buying a house and minimizing your turnover. Also, learn how to navigate public real estate records. This comes in handy when verifying rental history from an applicant. A lot of times, an applicant's prior landlord is fake. I've denied applicants a few times by tracking down the real landlord who just so happens to be in the process of evicting them. 80% of your applicants will be lying somewhere on the application.
Good luck and keep us posted on how you're doing.
Ken
- Member since 2020 · 38 posts · 68 votes5y
Hi @Maile Clancy!
Bigger Pockets is a great place to help you along the with self management. If you have not already I would recommend checking out the Property Management tab under the Tools section. Here you can find recommend software and companies to help you build a successful process. I'd suggest researching the companies and see which would best fit your needs!
Best of luck to you!
- Investor · Tampa, FL · Member since 2017 · 589 posts · 251 votes5y
It comes down to what your time is worth. Managing an asset can sometimes be great with no hiccups or a complete nightmare sometimes. This nightmare usually occurs after a long day at work or etc. You certainly can save some money instead of paying a month fee to a manager but you will have to account your time and knowing that you will be the main point of contact for every single little thing. If your cool with that then save some money, but if your grabbing 12 units here and there perhaps your time is a little more valuable :) Best of luck to you
- Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes5y
I self manage 9 units with a full time w-2. It is a blast and don't let anyone tell you any different.
I repositioned the properties, so I went from dealing with "inherited headaches to "no issues, pleasant professionals."
1. I paper any problems. Any late rent, any lease violation, complaints, etc.: They all get papered. Notice to cease then notice to quit. Demonstrates that you are a professional and provides you with the ammunition should you need to proceed to court. WAY TOO many people on here say "I should have" or "I spoke to them on the phone." No!- paper. I have not needed to utilize this since placing my tenants.
2. No phone calls. Chosen method of communication is text. If a tenant calls, let it go to voicemail. Do not get ambushed by a tenant. Know exactly what it is that they are requesting or reporting before speaking with them. Reply promptly and if you need to call, that is fine because you know what the issue is. It will also cause the tenant to reflect on any request they are making as they type out a text. The peace of mind it will give you is huge.
3. If ambushed, the answer is "No." If you are on the property and someone comes running up with a request, the answer is "no." If you like you can say, "This is the first I am hearing about it, I will have to give it some thought." I wouldn't even do that, no harm in changing your mind later. Had a mom send her cute little kid running over to ask me, with puppy dog eyes, if she could put a trampoline in the yard. "Absolutely not." Oooooh, sad face. One of many "no's" delivered to that inherited tenant.
4. Learn the communitive property of rentals, it kicks in after you take over for a year: crappy tenants = crappy landlord, good tenants = good landlord. Do not misdirect your failures onto a tenant.
5. Inspect each unit and building and make a to do list: "must, should and would be nice to."
6. Learn your market. Check Zillow on a regular basis (or craigslist- this is no longer a consideration of mine.) You are far, far better at gauging the comps then an algorithm. Keep track of location, amenities, allowances (pets) and utilities. Observe how long they are on the market and keep a record of it. Go out and look at your competition. See just how different they are from the screen... How can you compete and win?
7. Get in touch with other landlords in the area. You can always help each other out- from referrals to advice.
8. Get down to the municipality/city hall. Introduce yourself, make nice, introduce yourself to the administrator. I drop everything when they give me a call and they appreciate it. I need to go to them for all routine inspections. Not to mention plan approvals, etc. They love attentive landlords and will fight for you when you need them.
9. Spend time on the properties... clean, weed, etc. Give you some time to say hello to area neighbors. Pays dividends.
10. Screening is everything. Here in NJ, bad tenant/landlord relationships are protected and codified. You have to be a real reprobate for the courts to evict you. So before I "marry" that tenant I make sure, as best I can, they fit the bill. Take a loss on vacancy vs. potential bad tenant
11. Did I say screening is everything? It is- really. You are going to have to say no to people your kind heart will want to say yes to.
12. Your no dope, if someone needs to tell you a story in order to explain why they broke a term of the lease, they are not right for you. End of story, paper them and begin transitioning them out. May take some time, but don' be anyone's fool.
13. You will be LOVED. Yes, yes, I know this is contrary to what touchy feely twits who pride themselves as being "woke property providers" will say. Good tenants like a tight ship. Bad tenants hate them. Good tenant wants to live in a clean, peaceful building with other good tenants.
14. Do not entertain a vacancy because you have a false sense of what market rent is. I believe that if your apartment is "at" market rent, then by definition, it should rent. "Oh, but it is January, you don't understand!" Yes, I do understand, market rent in January is different then market rent in June. It is fluid. If you have a unit "at market" and it doesn't rent in January and February but rent's in March- then you had it at March's market rent 2 months early. One of my units going vacant for a month is roughly $2k, me dropping the price by $25-$50 is $300-$600 over the year. I like the math of dropping the price vs. holding out for an incorrect market rate to become a correct market rate.
15. You and your husband are in the best position to be the best managers of your property. Do not second guess that. Sure, you will make mistakes- but you will learn from them and become far better for them. Btw, make landlord friends, that is where you get good, unfiltered advice and dinner's are a blast! Oh the stories!
16. Have a blast. It is fun and has provide my family with the economic freedom that our 2, w-2's couldn't.
I wanted to add this because I saw some advice about telling tenants you are the PM. This comes up from time to time and some are proponents of it because "you don't look like the bad guy." I cannot begin to tell you how much I disagree with this theory. That is my asset. I want every tenant to know that it is my asset and I care for it very dearly. I tell them when screening that I am extremely particular about approving a tenant because of the value I place on it. The buck stops with me. You have a direct line with the owner. Never be afraid to assert your authority as the landlord. And guess what... when you have a building full of your tenants they are going to want to take care of it. Because they appreciate that you do your job. Don't ever be ashamed of being a good landlord. If you want to be a crappy one- then tell them you are the PM.
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