Should I consider using a property manager
I am looking to do my first house hack. My w2 job I can be away for over 30 hours at a time and have to have my phone turned off up to 12 hours at a time. Would it be best to use a pm just in case of emergencies?
Yeah that could be a good idea. It will also give you the advantage of the tenants not knowing that you are the landlord lol!
I would especially since you'll be away for such long periods of time. I house hack and I do it all myself. But I still have time to manage it
Quote from @Jason Smith:
I am looking to do my first house hack. My w2 job I can be away for over 30 hours at a time and have to have my phone turned off up to 12 hours at a time. Would it be best to use a pm just in case of emergencies?
A PM may even make sense if you live three blocks away. How well do you know the rental market? How good are you at marketing, screening tenants, and spotting red flags? Do you have a strong lease and know how to enforce it quickly and professionally before problems get out of hand? Do you know and understand the law?
There is much more to management than collecting rent. Most of my Landlords make more money after paying my fees than they ever did with self-management, and I save their time and sanity.
Contact Mary Hurd at Rent Smart Missoula and see if she can help you.
Thank you guys.
Jason,
If you have less than 10 rentals, you can easily do it yourself. I've been a landlord for over 10 years and spent most of my time deployed to the Middle East. If I can manage my rentals on the other side of the world, in a backward timezone, with crappy internet, you can definitely do it with your W2 job.
It's only getting easier with technology and if you build in systems that give you real freedom. Note, this will not work if you're a cheapskate landlord that's not willing to invest into running a business. I call it the plain vanilla business advantage. For example, it won't work if you try to run a mom-and-pop do-everything yourself operation. You have to have a website, FAQs, eforms, surveys, systems, etc...stuff that gives you leverage and buys you time with efficiencies. I have so much to say about this, but not enough time...
Just understand that everyone is giving advice with their own unique "my-side" bias. Plus, people are always selling something, if not themself, their image, their referrals, etc.
Anyways, that's my 2cents. You will do what's best for you, just be solution-oriented and use system thinking. Use feedback to optimize your process to produce better outputs—keeping the most important priorities in mind.
Rene G
I love all the PMs that post their fear porn on here when there are questions from investors worried about the time it takes. @Rene G. is spot on. Do it yourself and get systems in place. There are so may free resources.
I have 4 SFHs that I own and manage. one is an 1:15 drive away - I haven't needed to personally go to that property. I have had repairs done. I found handymen using either Thumbtack, FB Marketplace or local REIA investor recommendations. I called them, got the estimate and had the job done. I paid the tradesmen via Apple Pay, PayPal, check, Zelle, etc...
The thing that most new investors need to get through their head is that not everything is an emergency. Some companies offer a maintenance contract for cheap. For example. for $10 a month the gas company has furnace repair insurance. I send the contracts to the tenants and tell them to call that number, not me. Most repairs are covered under that contract.
The above is by the situation.
By the numbers, PMs cost a lot of money. Generally, the charge you a first month's rent commission, they charge you 10% of rents collected and then they charge you several hundred dollars to renew a lease, which is just a change of dates on a lease and a bump of the rent. So on your first-year lease with a PM, you will only get 11 months of rent and only 90% of rent income. So if you had a rental for $2,000 in your first year you would have paid a PM $2,200 ($200 x 11) plus the $2,000 rental commission. That is $4,400. That is a good amount of money and this does not include any repairs. Mind you that the PM also holds a reserve that they hold onto. This is just to collect rent, which can be done by you for free. Take that $4,400 and multiply it by 2, 3 or 4 rentals. I don't know about you, but for $4,000 - $16,000 extra a year, I will figure out how to handle phone calls. Develop a system that works for you.
Some PMs make money on your repairs. Either they get a discount on repairs that they don't pass onto you or they charge you 10% on top of the repair costs.
PMs cost a lot of money and dip into a new investor's bottom line.
IMO identify what you would consider an emergency. The only thing I can think of is that there is a major leak. Show the tenant where the water shutoff is for the house. Get a Google Voice number and see if you can have a friend/family member answer it when you are not available.
As for the market rents, there are plenty of resources to include BP that will tell you what the going market rents are. Any realtor can also do comps for you and you can see what rentals are currently on the market in your area.
I have published how I manage my properties in the past. Feel free to look at my post history for the detailed posts. If you can't find it, reach out.
I can do it. I have a demanding full-time job that requires travel and I work about 60 hours a week. You can figure it out if you want.
Take control of your investment. Don't let someone do it for you.