What do you think? Switching from Property Mgmt. to Self Managed

Question

Hi, I have a few properties that I'm transiting from being managed by a property management company to being self-managed.

I'm putting together a plan to self-manage.

What are some of the things I need to consider? What do you think about the plan?

• Have Them Sign New Leases - I need to have them sign new leases with me instead of the property mgmt company
• I need to have them sign new leases with me instead of the property mgmt company
• 
• Work out rent/payment details - Online Pay - I plan to offer online rent pay options through Apartment.com's property management toolIn-person Drop Off / Mail-In option / Night Drop Box I have a local credit union with multiple branches. The tenants will be able to pay in person at the branch or use the night drop-off box. Or mail in a money order. The tenants will need to indicate my telephone number as the account and their address and the credit union will apply their rent to my account. In-Person Pick - I have an older tenant where we picked up the check from her house. I plan to continue this. I have a Father in law in town how'll drop by. Maintenance - I have an on-call plumber and electrician and a general maintenance man, who'll I call when needed.
• Online Pay - I plan to offer online rent pay options through Apartment.com's property management tool
• 
• In-person Drop Off / Mail-In option / Night Drop Box I have a local credit union with multiple branches. The tenants will be able to pay in person at the branch or use the night drop-off box. Or mail in a money order. The tenants will need to indicate my telephone number as the account and their address and the credit union will apply their rent to my account.
• I have a local credit union with multiple branches. The tenants will be able to pay in person at the branch or use the night drop-off box. Or mail in a money order.
• 
• The tenants will need to indicate my telephone number as the account and their address and the credit union will apply their rent to my account.
• 
• In-Person Pick - I have an older tenant where we picked up the check from her house. I plan to continue this. I have a Father in law in town how'll drop by.
• 
• Maintenance - I have an on-call plumber and electrician and a general maintenance man, who'll I call when needed.
• 
• 
•

• I need to have them sign new leases with me instead of the property mgmt company
•

• Online Pay - I plan to offer online rent pay options through Apartment.com's property management tool
• 
• In-person Drop Off / Mail-In option / Night Drop Box I have a local credit union with multiple branches. The tenants will be able to pay in person at the branch or use the night drop-off box. Or mail in a money order. The tenants will need to indicate my telephone number as the account and their address and the credit union will apply their rent to my account.
• I have a local credit union with multiple branches. The tenants will be able to pay in person at the branch or use the night drop-off box. Or mail in a money order.
• 
• The tenants will need to indicate my telephone number as the account and their address and the credit union will apply their rent to my account.
• 
• In-Person Pick - I have an older tenant where we picked up the check from her house. I plan to continue this. I have a Father in law in town how'll drop by.
• 
• Maintenance - I have an on-call plumber and electrician and a general maintenance man, who'll I call when needed.
•

• I have a local credit union with multiple branches. The tenants will be able to pay in person at the branch or use the night drop-off box. Or mail in a money order.
• 
• The tenants will need to indicate my telephone number as the account and their address and the credit union will apply their rent to my account.
•

•

Nathan Gesner · Answer

No, they do not need to sign a new lease. The current lease remains in effect until termination or mutual agreement. All you really need is a one-page letter saying you are taking over management, how they should pay rent and how to contact you for maintenance issues. All tenants sign, you sign, and you proceed. When the lease is due for renewal, then you can use a new one.

The rest sounds good. Make the tenants deposit rent at the credit union. Don't collect it and don't let another renter collect it. Straight to the bank so you know exactly who is at fault if rent is not received.

Drew Sygit · Answer

Issues to consider:

1) Recommend NEVER to pick up rent! Bad strategy as waste of time and could lead to mugging.

2) Are the plumber, electrician and handyman properly insured to protect you if they get injured on your property or injure a tenant?

3) How are you complying with your state laws concerning security deposits?

4) Who will handle your evictions?

Drew Sygit · Answer

@Rema W.

No offense, but wow are you naive!

1) Insurance - PMC insurance only insures you and any staff against accidents at you place of business. No coverage at the properties.

2) Trades - you're going to assume they are insured? What happens when you are sued and you find out they weren't?

3) SD - so you've read up on your state's SD statutes?
- How long do you have to return an SD?
- Are treble damages a concern?
- How long does a tenant have to give you a forwarding address?
- Etc, etc, etc...

4) Evictions - how can a Realtor represent you in court? Only an attorney can represent another party in legal matters.

Appears you are going into DIY management without doing your full due diligence and believing the first piece of advice you receive without challenging it. That'll be fine while everything is going perfect, but you may learn some very expensive lessons when something goes south.

@Nathan G. - you are 100% correct on the lease! You can usually though, coerce a tenant into signing a new one as they rarely understand the process.

Karl B. · Answer

It sounds like you have it figured out. I would advise having at least two plumbers, two electricians, etc. as more often than not tradesmen are busy and at times have a waiting list for work.

As others have alluded to there's no need to pick up payments. If the older tenant wants to pay by check have them mail it to you.

Aside from that, good job on making the change. The extra 10+% is well worth the bit of effort needed to self-manage.

Scott M. · Answer

Keep in mind that the grass is never greener : ) Not sure why you are making this move but first and foremost be sure it is for the right reasons. You are at a crossroads and you will look back and be thrilled you did it and wonder why you waited for so long or you will rue the day. That said I am rooting for you and hope it is all a very positive move.

First off, one thing you said is not accurate, you do not need tenants to sign a new lease. The exsisting ones are fine. You can ask them but they are under no obligation to do so and no need to worry if you don't.

I love you are giving your tenant(s) options on payment. That is always a positive thing. Well done on creating so many options. People often ask here 'what is the best way to collect rent' and my answer is always the best way for the tenant (within reason). And always advocate for options.

Seems like you have a lot of the basis covered on the maintenance side as well.

I would add you should think about security deposits, and the law in general. if you don't have a good re lawyer who specializes in landlord tenant law you should look into adding that. Great to have on your side and when you NEED them is not the time to find them.

I think this is a great first step on your new venture!

Rema W. · Answer

@Nathan Good point about the lease. I didn't consider that they didn't need to sign a new one.

That makes things easier for the transition.

Rema W. · Answer

Insurance - I considered getting property management insurance. Do I need it?

The plumber and other trades are licensed so I assume the liability would be covered.

3) security deposit - I'm hold the funds and track it and will return when applicable.

4) evictions - I spoke with a realtor who've I worked with in the past. They'll represent me in those matters on an ad hoc basis

What do you think? Switching from Property Mgmt. to Self Managed

What do you think? Switching from Property Mgmt. to Self Managed

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