I have a question for all diy 3 to 5 unit owners. How much time are you spending at your multi family unit per year doing maintenence and property management. I've looked at 3 deals so far that the numbers didn't work out for me. This week I'm looking at a 3 unit with a little better return,,,,, but,,,,, the last figure I need is my time. This will be my first property that I will be doing 90% of the work myself. I have most of tools and knowledge and even some of the material (leftover pipe fittings, wire, recepticals). Also, this property is not a rehab, just us typical 30 year old 3 flat. Thanks for any input.
Hi @Joey D.
I'm wondering what length of term financing you are looking into? 15/20 or 30?
Also, are all the benefits of rental real estate (appreciation, cash flow, tax benefits and principle pay down) worth your time even if it doesn't mean a ton of cash in your pocket every month?
I totally get what you are saying... That you want to make sure it's worth your time - but remember rental real estate ownership is different than any other 'job' out there...
The benefits are so much more than the monthly cash in the bank.
Thanks for the reply ashley. I hear you on the pay down and tax advantage, but I have no idea if it takes 10 hours or 1000 hours of effort per year. I don't think it's as high as 1000, but for argument sake let's say it is, even with he tax benefits and pay down I might be working for minimum wage. At that rate it could take me 10 years of grinding it out to save for second property.
For my 1 property (3 units) I spend about 1 hour every two weeks doing yard work but that will be less now that winter is coming and the grass does not grow as much. As far as repairs I would say every 2-3 months I spend maybe half a Saturday fixing minor things that probably is the tenants responsibility but I usually just do it to keep everyone happy.
@Joey D. That is a very hard question to answer. I have three (3) duplex houses (two units), and my time to manage the property is not much. Obviously the more you want to do, the more time it takes. And the condition of the property also affects things. For my units, I do all the repairs/issues myself (except for yardwork).
I would say my older duplex I spend about 75-50hrs a year, but that is all maintance (everything from minor fixed to large items like roofing). If I dont have any major items that need to be done that year, then its likely 20hrs or so (just minor issues plus unit turnover). In my newer duplex's, that number is very low. I no longer do yardwork or other monthly items that I can effectively pay someone else.
I will say that turning a unit over take time, between cleaning, repairs, painting, etc, I spend about 5-15hrs on each unit. In multi-unit houses, your turn over will be higher than SFH.
Hope this helps.
Thanks for the input guys, that is the info I'm looking for.
Good thinking Joey. I have 4 plex. And this short answer, of course, is that it depends...a few items to think about...
) Snow removal, an issue in Chicago (this alone can take a few hours a week unless you outsource it)
) Vacancies, as mentioned above the preparing, showing, screening are probably the most time consuming parts
) Maintenance/Repairs, these can vary... for example, if you are painting this rascal this summer, your hours will skyrocket. Think about yard, cleaning gutters, and much more. Deferred maintenance can also bring up the numbers. 30 years may hint quite a bit items at/neat end of useful life.
) Inspections, tenant issues, communication, etc. There will be some level of this, depending somewhat on your tenant quality.. It can run to little or nothing but maybe an annual inspection to regular reminders and warnings.
) Paperwork, and we always think about the building and tenants (people and property issues) but you have some records and work on taxes if DIY on this aspect. You may also have some research on repairs/contractors and building issues as well as keeping pace with other changes and practices.
Of course, there are lots of way to reduce your time--just getting a rental nearby or on your commute is huge (cuts hours dramatically on driving time) and, as mentioned, above outsourcing something regular like snow removal or yard maintenance can also reduce your hours.
I wish you the best in this exciting enterprise ahead.....as a DIY landlord....
can i hear someone's opinion who's name is not mike,,,,,all kidding aside good info guys, about the time I though would be needed, maybee even a bit less. Now for hard part,,,,,, the down payment.
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