Alternative to property management... thoughts?
So, I mostly just wanted to share an alternative view on the whole property management vs. deal with headaches yourself debate.
I have 6 units in three states: 2 apartments and a store in Brooklyn, a condo in Florida, and two units in PA.
I live 2 hours from all of them except the Florida condo.
I use a PM for the two PA units and manage the rest myself. (The RE agent in FL does some light PM work for "free").
The Brooklyn one is my first, my "baby," so I wanted to do it myself for the experience and because I've heard horror stories about PMs, plus NYC PMs for small owners tended to be pretty pricey with not great reviews. However, I am very busy and have zero desire to do much PM work. I never want to hear from tenants. I read about owners who "check in" with their tenants every 30 or 60 days and think "I see how that is 100% great advice, but I have ZERO desire to do that." My goal is to field 3 emails per unit per year, and one of those should be telling me they want to re-sign at the new rental rate every year.
So far I have been VERY successful in achieving that (more so than I think anyone can fairly deserve to expect).
Here's the catch (no free lunch). I thought to myself, "I could pay a PM 12% to give lackluster service to me and tenants, OR I could set the rents 10-12% below market rate and be very up-front about who I wanted to rent to." You: self-sufficient tenant, can handle minor tasks yourself, can be home to meet contractors, can find and schedule your own contractors, are happy to pay those contractors out of next month's rent, must be willing to do electronic rent payments. Me: laid back, non-intrusive, will not be a cause of delay for repairs because I'm not involved beyond sending you a confirmation email within 24 hours when you let me know you have an issue that you are seeking professional help resolving.
Maybe I'm just the luckiest guy on earth, but I've had several tenant groups/families so far and everyone has: (1) been either perfect or close to it, (2) rarely needed a plumber/electrician/other paid contractor and never appeared to be trying to "take advantage" of the situation, (3) seemed super happy with the arrangement.
One reason I thought this might work is my own personality as a renter. Just like I don't like calling tenants, I also don't like calling landlords. I prefer to fix minor things myself. Even paying for inexpensive parts if needed just to avoid strangers in "my" house/apartment. I figured, hey, maybe there are others like that out there who would love to have a solid 10% discount on their rent to just live the way they want to, to the mutual benefit of us both. So far so good... (famous last words?)
When tenants pay $2000/mo for a $2000/mo apartment they expect service. When they pay $1800 for that same apartment they're happier, friendlier, less demanding (my experience). So do you want a demanding tenant serviced by a PM or a happy self-sufficient tenant serviced by themselves? Same price to you either way.
[Obvioulsy, not for everyone, not for every situation... even I have started using a PM for units 5 and 6, because while I could handle a 5th and 6th great tenant, I do understand that this system has the POTENTIAL to turn into a time-suck at any moment.]
Thoughts?