Anyone do their own property management?

General Landlording & Rental Properties
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Anyone do their own property management?

Mel Park
Member since 2021 · 92 posts · 51 votes

I've owned (2) rental townhomes for 8 years - I've used a property manager and I've never once had any problems.   However - - now, this won't just be a 'side' investment, I am out of my lifelong business career - - and real estate investments will be a key part of what hopefully is my investment path from now on.     About me: I have NO knowledge in home maintenance. None, zero.   Eventually I am hoping to buy 4-5 units - could be townhomes, could be Single Family.  Metro areas.   Lately I've been wondering - could I do it without a property manager and I'm SURE there's things I'm not thinking of. My thought process:

*Advertising the rental. Learning how to take good pictures, and advertising on the proper sites. 

*Tenant screening: Credit report.  Landlord reference. (Preferably even a non current landlord. Skeptic in me worries if a current landlord would give a good reference to a bad tenant, just to get them off his books?)

(In my previous business - for 20 years I had a staff of 40. Hired people from all walks of life. Was involved with direct retail selling, every day and had to evaluate credit reports daily and at times, make judgement calls about selling to people - - and then getting them approved after the fact....rarely made a bad call. )

*Rent Collection:  Just make online payment a requirement?  I'd rather not knock on doors for rent.  

*Maintenance: Is it customary to put a deductible in - say $100 per incident?  Point is not to get calls for a light bulb going out. 

(For normal stuff - I've ALWAYS told my property manager to get it fixed, get it fast and right. Keep the people happy. I don't think twice about replacing a washing machine for instance. ). Point being - my property manager merely calls a plumber, electrician, whatever - he doesn't repair it himself -- - so why can I just cultivate relationships with handymen?

*Turnover:  I guess that involves collecting keys, changing locks, walk thru inspections - and then doing clean ups, carpets, paints as needed?

FEARS

********

I plan to stick to somewhat nice areas, not too downscale. I'm fine with slightly less ROI if it means a better credit tenant who I sense won't be a problem or abuse the property. Point being - if I start out with a decent tenant, I"m responsive to maintenance problems and don't cut corners - I'm HOPING to avoid angry tenants - - hopefully that is realistic.

*EVICTIONS:  I can't imagine having to go kick someone out of their house. 

*TOUGH CUSTOMERS: From McDonald's to the Four Seasons - all businesses have them - people who just are never ever happy.  After selling my businesses, I'm sort of sick of that after 20 years :) .  Am I realistic thinking that most tenants, are fair minded as long as I do all I can to uphold my end?

*SAFETY:  These days, people are nutty.  Am I too paranoid thinking that if there's a problem collecting rent, and I have to tell people to leave....they'd come after me personally?    Think of all the  workplace violence - why would this be different?

I keep doing the math..... if I own 5 units@20,000 gross rent.    By the time my first kid starts college, I'd save $50,000 in property manager fees.    For a 46 year old who is sort of retired - - $50k is a nice bonus.

Any thoughts, positive or negative I'd really appreciate. Thanks.




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Brandon RushPro Member
Real Estate Agent · Portland, CT · Member since 2019 · 761 posts · 849 votes
5y

Hey Mel,

Great question. For me personally, it would come down to two big questions:

* Do/Would I truly enjoy property management?
You have to be honest with yourself here, do you "REALLY" want to take on these tasks and be able to enjoy the work? If not, I would say do not waste your time. By taking on work you did not have to do from the start start, it could easily turn this into a job for you that you may not enjoy. Which will eventually slow down your real estate growth. As you mentioned, there are many facets of property management, do you want to take all of that on yourself?

* What are your future goals?
How would property management align with your future goals? Would it help you build more capital by saving the 8-10% management fee every month or would it teach you something that will help you reach your goals? Example, if your goal is to acquire 20 properties in the next 5 years, how will or will not managing your own properties help you achieve that goal? Think of your end goal and work your way backwards.

I hope this helps out in your decision. 

Good luck on your journey!

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  • Kay March
    Gainesville, FL · Member since 2013 · 127 posts · 21 votes
    5y

    I've self-managed 2 to 4 houses over the past nine years. Of course I've considered hiring a PM at various times, especially at turnover, but I've seen a number of PM managed properties decline due to neglect, including a very nice house ($600,000 plus) nearby that was managed by one of the best-known companies in town. The tenants reported a leaking refrigerator three times as well as a leaking roof but the PM didn't take action, and the house became infested with mold. So it's not only cash flow considerations that motivate me to do my own managing. Just to continue the example, it's because I self-managed one of my own houses that I discovered, in the course of repairing a faucet, that the tenants were making a habit of stuffing towels in two areas where there were leaks. I also discovered that they enjoyed leaving the windows opened when it rained -- a big "no, no" here in Florida. Although I tried, I could not get them to appreciate my point of view on these matters, so I allowed their lease to expire. I don't think a PM would necessarily have noticed the problems or ended the lease to solve them.

    3Reply
  • Tricia O'Brien
    Investor · Anchorage, AK · Member since 2015 · 267 posts · 76 votes
    5y

    It is easier to self manage a B class rental than a D class. However, in the D class areas, where you really need the help, it can be almost impossible to find a good quality property manager. So you have to do some of the work yourself at times with a D class rental  as in  "manage your  manager"  even though you are paying a property manager.  If you do not supervise your out of state property manager through emails, phone, drive by inspections by others  etc sometimes they'll neglect maintenance and jeopardize the safety of the tenants. 

    5Reply
  • Jane S.
    Flipper/Rehabber · Colorado Springs, CO · Member since 2016 · 499 posts · 167 votes
    5y

    Its not THEIR house, it’s YOURS. Never lose sight of the importance of every property you own in that each one is a vital ASSET for you and you need to  protect and preserve that asset. Single family houses are pretty easy to manage since the tenant is responsible for maintaining the condition, yard, utilities, and paying for same. I have a PM for occasional thigs that I can no longer physically do i pay him by-the job. He’s about $30/hr. And very reliable and careful.

    2Reply
  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    5y

    It really depends a little bit on personality type as well as Systems. There’s never a problem unless there is one of course. I know that not all PMs are created equal. I have some properties that I self manage and I have some with PMs. Most of my new rentals will probably be with PMs. I understand I would be losing money, but I could actually be making my life a little bit easier. I have placed bad tenants in homes before because my screening was less than perfect.

     Also when I mention personality types let me explain. Are you the kind of person that somebody can manipulate with sad stories or throwing tantrums? Are you the kind of person that is easily befriended by tenants and then they get away with stuff that they shouldn’t?

    1Reply
  • Joe S.Pro Member
    Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
    5y
    Originally posted by @Jane S.:

    Its not THEIR house, it’s YOURS. Never lose sight of the importance of every property you own in that each one is a vital ASSET for you and you need to  protect and preserve that asset. Single family houses are pretty easy to manage since the tenant is responsible for maintaining the condition, yard, utilities, and paying for same. I have a PM for occasional thigs that I can no longer physically do i pay him by-the job. He’s about $30/hr. And very reliable and careful.

     Please explain the arrangement of how you can pay a PM by the job/hour.:)

    0Reply
  • Philip JosephPro Member
    Investor · Warner Robins, GA · Member since 2021 · 97 posts · 51 votes
    5y

    @Joe S.

    One thing that I learned from managing my properties and then hiring a property manager is that it pays to know what some maintenance cost.

    I’ve had to challenge several expenses such as tree removal and ac repairs because I knew it was much cheaper. Saved me $800 on a tree removal.

    3Reply
  • Kaylane Davis
    Real Estate Broker · GA · Member since 2018 · 36 posts · 10 votes
    5y

    @Mel Park missed- enforing the lease policy and proceedures which in turn has an effect on retention and maintenance/ wear and tear of the property

    1Reply
  • Shiva Bhaskar
    Investor · Los Angeles, CA · Member since 2017 · 523 posts · 476 votes
    5y

    Hi Mel. We purchase multifamily properties in our local market (Los Angeles) and manage in house. Below are a few things I've found:

    1. Have clear tenant screening criteria, and stick by them. We don't deviate from our credit score and income rules.

    2. Put in place a system for rent collection (online, checks etc) and use software to automate it as much as possible. If you can get every tenant to pay online, perhaps in exchange for a small reward of some sort, that is ideal. 

    3. Have a list of vendors for every situation. Make sure you test out a few of them to see who strikes the best balance of price and quality. Of course, not each vendor is always available (plumbers for example), so make sure you have several on the list. 

    4. Be comfortable having uncomfortable conversations and frustrating situations. You'll have to turn down applicants and have them cry or use foul language. You'll have bad tenants (even in good areas this happens). Be ready for this, and manage your emotions accordingly. 

    Best of luck on your journey! 

    3Reply
  • Michael Plante
    Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
    5y

    Property managers are like magical unicorns

    They were born knowing everything about managing properties and anyone who tries to manage their own property will fail miserably

    😂

    2Reply
  • Fred Cannon
    Rental Property Investor · St Augustine, FL · Member since 2019 · 264 posts · 279 votes
    5y

    @Mel Park I have 7 rentals, two that are short term 90 day minimum furnished condos. I am my own property manager. I don't want to give up 10-15% of my income. It's really not that difficult if you have a good team, electrician, plumber, handyman, AC, yard man. I do my own cleaning because my units are all 1 bedroom condos. I do have a handyman that will provide cleaning services. I advertise thru Zillow or for my furnished units thru Furnished Finders. I have no issues getting qualified applicants and both services offer background checks. I allow pets but charge pet rent. I have a $200 cleaning fee paid in advance. I use an excel sheet that I have created to track income and expenses I spend an hour or so weekly on paperwork and 6 of seven units are 5 hours away. I visit them when there is a move out/move in. In 10 years I don't think I have ever gone more than 10 days with a vacancy. I just don't think a PM would take care of my property or the tenants the way I do. And yes tenants require a lot of assistance at times and evictions do happen but there is the human element that May be lost with PM's when it comes to putting someone on the street I want to make that decision, same with repairs and who does them.

    3Reply
  • Patrick HancockBusiness Member
    Real Estate Broker · Orlando, FL · Member since 2018 · 101 posts · 108 votes
    5y

    @Mel Park

    I have been managing both my own properties and those for other investors for 17 years and I can say without a doubt to let someone else do it. Make sure to hire a great management company and factor in the 8-10% monthly management fee when you first analyze the deal before acquisition. This is especially true if your goal is to scale. You simply won’t have time to do it and it can be unbelievably distracting.

    [email protected]407-808-0899
    Pat Hancock at Thomas Lynne 527 Reviews
    WebsiteView Page
    2Reply
  • Karla Simmons
    Vacaville, CA · Member since 2019 · 218 posts · 140 votes
    5y

    @Patrick Hancock

    Finding a good property management company is easier said than done. We had two negative experiences. I am much happier managing my own properties, finding tenants, etc. I know it is getting done right. Finding the right tenants when there is a turnover is the most time consuming part . But for me it’s definitely worth it and manageable. Everyone has their own experiences .

    0Reply
  • Patrick HancockBusiness Member
    Real Estate Broker · Orlando, FL · Member since 2018 · 101 posts · 108 votes
    5y

    @Karla Simmons

    Absolutely if you prefer to handle it yourself than there is nothing wrong with that. For me personally I own properties in different markets as well as where I live. And as I mentioned I’ve procured tenants and managed properties for dozens of investors over the years. What I found is it’s not worth the money, the headaches and my efforts/focus is better spent elsewhere to continue to scale. Just depends o. What your goals are.

    [email protected]407-808-0899
    Pat Hancock at Thomas Lynne 527 Reviews
    WebsiteView Page
    2Reply
  • Eric GoldmanBusiness Member
    Lender · PA · Member since 2019 · 359 posts · 192 votes
    5y

    really comes down to if you have the time to do it. Do you want to be a "landlord" and everything that comes with it? if you are working fulltime and do not have the time I would hire a property manager. If you are not close by. hire a property manager. When it comes to your fears yes they are real. You will have to have those hard discussions with tenants. I wish you great success either way with great tenants! 

    484-574-4878
    G2loans- Investor and Commercial Mortgages531 Reviews
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  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    5y

    I think the "I can do it, you can do it" logic is highly over stated. You could use that logic for any profession. "Could I be a brain surgeon" or "could I be a rocket scientist", yes you can do whatever you set your mind and focus on. The question is not whether something is possible, but whether your skill set, interested and dedication makes it a good fit for you. Do you actually have time to learn the profession and do a good job? 

    Everyone who self manages thinks they do a good job. It is part of the narcistic human condition. The reality is that the world is filled with tired landlords. Tired landlords do the bare minimum in managing and upkeeping their property. They don't raise rents and they grow to hate the profession. If you fear vacancy, you are a tired landlord. If you complain when a tenant reports a leaky faucet, you are a tired landlord. If you think it is ok to rent a property with stained carpet, you are a tired landlord. If you think your "gut" is a great tenant screening tool, you are a tired landlord.

    Property management is a profession. People who do it successfully are trained, experienced and have detailed procedures. After 15 years and managing 13 properties, I am still learning and improving. 

    You don't need to know how to repair things, but you do need to know if things need to be repaired. If a tenant tells you the garbage disposal isn't working, most people would just call a plumber. I ask them "did you press the reset button under the disposal" and half the time that fixes it and saves an expensive service call. There are a thousand examples like this I could provide. 

    You need a good contact list of reliable people who will do quality work at your properties. Most DIY landlords think they need inexpensive help, but in my experience reliability and quality is more important. If you have a plumbing issue, you need someone there fast who will fix it the first time. 

    You need policies and procedures to be able to respond quickly to common requests such as:

    - Can I paint this bedroom blue if I buy the paint and do it myself?

    - I need to break my lease, what is the process?

    - You stop over at the property and there is a kitten running around that you were not aware of. They say "we got if for the kids two months ago". What do you do?

    - I lost my job can I pay rent two weeks late this month?

    - The neighbor is making noise late at night and smoking weed. I am ready to move out, can you please fix this?

    These are just some examples of common things you may encounter and you need to have a quick response. Some DIY landlords will say, "I will get back to you", which can harm your credibility. It is far better to say, "our policy is X". When you say "I will get back to you" or "let me talk to my partner", it creates the belief that the policy is flexible or negotiable. Firm answers get less push back and have more credibility.

    The final thing to consider is that ANYONE can manage GOOD tenants, but not all tenants will be good. Some DIY landlords confuse luck for skill. They have a couple great tenants and believe it is their management skills that made the tenants great. This can be dangerous thinking, because when you have bad tenants, you will not be prepared and it will quickly overwhelm you. I had the benefit of managing D class apartments when I started out. That experience gave me a tough back bone. Any great property manager has had the experience of dealing with bad tenants. When you manage 100+ units, bad tenants are unavoidable. When you manage 10 or less, you could go a while without a bad tenant. The advantage a property management company has is scale. They have experience scale, process scale and even scale when it comes to hiring and managing vendors/contractors. When you manage hundreds of units, you are less likely to say "I have never had this problem before". 

    My goal wasn't to scare you out of self managing. Self managing has reduced my expenses by 25% or more. This reduction is not just the lack of management fee, but no leasing fees, lower repair expenses and near 0% vacancy. Just be aware that it is a profession/job and it can be a hard job at times. 

    4Reply
  • Patrick M.
    Rental Property Investor · Red Bank, NJ · Member since 2017 · 1k+ posts · 1k+ votes
    5y

    I have and enjoy managing my properties. 2 buildings- 9 units.

    I recommend no deductible on maintenance, if there is a leak- you want to know about it... you don't want a tenant looking at a small problem and seeing a $100 bill. I don't punish my tenants for reporting small problems which could grow. I also don't want them to bring in their jackass buddy to fix a problem for a 6 pack.

    Background checks and credit reports are very important to me. I have been less concerned with landlord referrals precisely for the reason you stated. We are in very difficult times right now, my tenants are almost all young professionals who have documented income and will one day be looking for a home- they know from my interview process what I expect and what can be expected- i.e. I will use the courts, judgments, etc.

    I had one tenant who had a side hustle as a photographer- she took photos of her unit prior to re-listing which are just gorgeous. I will use them from now til forever. I have another tenant who should have been an interior designer, I went in and took photos of her place which I will always use. Professional or semi-professional photographers can be a worthwhile expense if you have a clean tenant with a well furnished living space.

    Advertising- I will transition to 100% Zillow on my next rental unit- They allow the applicant to use their background and credit report on multiple listings and cut out a step in the process- decisions can be made at showing. That is where my potential tenants look.

    Rent collection- Zelle.

    Turnover- We go in and do a deep scrub cleaning and touch-up of paint. Landlord Locks makes lock change out easy-peasey.

    Safety- I had concerns with an inherited lunatic who called my home phone which was not given out- to scream at my wife. I got rid of him. Every interaction I documented in an ever updating notice to cease and quit. He left.

    Tough customers- I recently rented to a millennial who contacted me via text a couple of times within a week of moving in. The last text was about a very nice couple who had a dinner party upstairs and that it was loud. I politley explained that I do not get involved in inter-tenant relationships and that she lives in a multi-family. I told her that I had serious concerns about her being happy in the unit and offered to let her out of the lease. No more texts, just happy hello's and she is great.

    The thing you must realize is that you are 100% in control of the people you place in your unit. Don't ever tell yourself otherwise, because their is a lesson in every tenant, especially bad ones, and if you blame it on outside factors you'll never learn it. When I started out I rented a newly renovated apartment to a person who waived a red flag at me. Nothing "bad" came out of it- but I knew I would have been better off had I been more concerned about the red flag and less about the rent. My next rental I sat on for +2 months vacant, paying attention to red flags and not my "loss." It worked out great. In the last 2 years my units have not been on the market for more than 2 weeks before I have shown it to numerous good candidates. Last vacancy resulted in tenants trying to bid up the price.

    With all that being said- I had a great mentor and I shutter to think where I would have been without him. You need this. Get involved in a local group- you need the unfiltered comradery and advice of others.

    And please, please, don't start counting your rent checks yet! I sank a lot of blood, sweat and cash into my buildings and a lot of 0% credit card transfers to rebuild these buildings- doubling rents and pricing out crap tenants. Also, some marital un-bliss... It was a stressful couple of years- but I firmly believe that the most cash lies in repositioning, not these turn-key promises.

    Now- my kids are in private schools with healthy 529's that are contributed to every month. We max our 401k's and contribute to mutual funds, prepay our home mortgage, have an unencumbered apartment in my wife's home country and are purchasing another. We vacation 3-4 times a year... We finally got back to Paris in June, and just back from a road trip with the kids. Still drive my Hyundai! But I was never in it for the cars ;) And my tenants texts and concerns are immediately addressed.

    Get a mentor- and a mentor that wants nothing from you but to share his experiences and knowledge. There are sooooo many of us! If he wants something from you, especially cash- you got the wrong one. Now, that is not to say that you will not develop a friendship of mutual assistance over time... but be mindful. Buy the book Landlording by Leigh Robinson.

    It is a beautiful life... but it is a job to be sure.

    3Reply
  • Martin T.
    Investor · Durham, NC · Member since 2016 · 13 posts · 6 votes
    4y

    I'm interested to hear from those here how you handle tenant turnovers. I find the thing that takes me the most time is not so much dealing with maintenance issues (I luckily have had very few issues), or difficult tenants (have not had many of those either), it's more all the little things that go into getting the place ready for a new tenant like paint patching and touch-ups, cleaning, re-caulking bathrooms, getting it cleaned and readied.  Often if there isn't much major work, it still takes me a full day or a couple of evenings to get that stuff done which is a bigger drain than putting up an ad and hosting an open house or two to get it rented.  Have others been able to find a handy person to handle all that for them?  Thanks

    0Reply
  • Alecia LovelessPro Member
    Member since 2019 · 3k+ posts · 2k+ votes
    4y

    @Mel Park I currently have 13 doors and do my own property management. I also have an awesome handyman I rely on for the things I can’t do. Worst case scenario I spend about 5 hours on average a week on property management tasks. One has a coin op laundry I have to get the money from but is 45 minutes away so that takes some time.

    The handyman and I are about to start renovations to my most recent purchase a 2unit we’re turning into a 3 unit so I expect to spend more time on the new property over the next few months. He has prioritized this as he knows I have it rented.

    I have a realtor who sources me early deals either before they go on the MLS or the first day they're on so my buildings are NICE. There's not a lot of maintenance. I do sometimes do flips but those tend to fall on the back burner a bit and take a little longer to complete than a usual flipper because the handyman had other accounts.

    1Reply
  • Jane S.
    Flipper/Rehabber · Colorado Springs, CO · Member since 2016 · 499 posts · 167 votes
    4y

    Its 50-50. Tenants MUST report any problems and they agreed via their lease to pay a set amount in any month to cover their damage. I use the sec deposit for paint and wear and tear fixing, my property manager does those. He's the greatest. He's also my broker.

    I am getting to the point where i might require a visit to their current rental if not more than 20 miles distance. Landlord comments are mostly BS. If they self eliminate i’ve got my answer and i saved time.

    Applicants who have always rented have learned how to manipulate LL’s, they can be very convincing while lying like T****.

    OUT OF state applicants will show you fake photos of a lovely apt they are moving out of. Way above their finances.

    I plan to tighten up very hard on my pre-approval questions since i heard they are creating their own “paystubs”.

    Also a personal call at their “workplace” would be far better than an eviction! I will get their permission just to rattle their cage. (Who let them out?)

    Just a note,I started an eviction on Nov. 15 2021 and finally got on the schedule for the sheriff to evict them Feb 3 2022 so think twice, it was my first and ONLY eviction … better to have a vacancy than deal with the law.

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