I am wanting to start a business related to RE investing. I am also currently managing my own properties because I am not at a point where I am dealing with headaches (6 tenants under two roofs). I have read a few of the BP books discussing how important it is to focus on working on my business (Real Estate Investing) than in my business as a property manager. However, I do believe I would be able to outsource much of the work in the property management business and hopefully make income off of managing other people's property.
I admit that I don't know what I don't know. However, I do know that one cannot just start managing other properties without a sales persons and or brokerage license depending on the state. I am in the process of getting my RE license. I also know that property management is a lot of work as expansion happens and can be challenging to scale. I do like managing/owning my business but am a little hesitant because I don't have experience starting a business and feel like:
1. It may take away from my RE investing time
2. It will be a lot different dealing with RE owners and their tenants compared to me just dealing with my own tenants.
I am seeking advice from RE investors who have started PM companies themselves who have had both positive and negative experiences and what they were
I am also seeking advice from RE investors who would absolutely never do this because of x,y, and z reasons.
Thank you all in advance for your thoughtful responses
@Connor Mather you are correct in assuming a PMC business will take time away from your investing.
It will also expose you to other opportunities to buy though.
To succeed, you will need to be very organized and create systems that you can then hire, train and delegate. Not as easy as it sounds!
We've seen and heard of several companies try and fail.
We have assisted some other owners that we know locally because we have a system and a platform already, and I have a RE license and a way to work under a broker (until I get my broker's license), and of course we manage all of our own properties.
There is opportunity there but IMO it's because PM is probably the least enjoyable aspect to owning real estate. A landlord/tenant relationship is really unique because tenants are not simple customers like most other retail or service business. There are laws that prevent either side from unilaterally ending the relationship. There are laws that govern the collection of funds, holding funds, responsibilities, etc. Your tenants are simultaneously like your customer and like your employee.
So think of the worst aspects of dealing with customers, and the worst aspects of dealing with employees, and that in a nutshell is property management. The reason there's a market for PMs is because many (most?) rental property owners don't want to deal with all that BS. If you're willing to deal with it, you can get paid for it.
If you like tenants and owners both complaining to you, then that's the business for you. I built mine from scratch. Currently have 150 doors and have become more picky with who I take on. Every day is a headache, you will need to learn to deal with that and not bring it home.