Please advice on managing rental property

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Please advice on managing rental property

Muhamed Abd.
Member since 2022 · 12 posts · 1 vote

Greetings,

I have been given the shared responsibility of managing apartment complexes owned by the family. I am having hard time to keep track of things. I would appreciate if any one can point me to  a method or software that help me keep track of things. I wonder if there is a smart way on how land lords do these things. Here are some issues I am facing:-

*People pay at different times of the month and in different complexes. Some pay monthly some pay quarterly. Some Pay half now with the promise of completing payments next month.

*People pay in cash, online, and cheques. Making it hard to keep tab on things especially online ones because you can see a bank account but not the name of the account owner. Can't tell who's who.

*Not sure how to keep tab on fixing costs and warranties on devices replaced like water pumps and water heaters. Its paper jungle

*Between 20+ tenants its really hard to know who paid, who is late, and who's contract is over or needs renewing.

I looked up some apps online but most of it seems some corporate sized apps with complex interface which requires subscription and tying bank accounts. I was looking for something more simpler. I wonder if an Excel should should do fine, if so can any one show a template or how I should set it up? Should I hire a 3rd party accountant to do these things? Can I trust him? because I faced many people that will do a sloppy job.

-----

How do tenants respond to yearly rent increase? Inflation is like 3% yearly, if I do not increase rent 3% yearly then this means i am losing 3% of my income year over year basically decreasing my income by 9% over the course of 3 years not to mention fixing costs. I am becoming poorer not richer. Also rent prices can generally come down based on economic conditions.

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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3y
Quote from @Muhamed Abd.:

A good property manager does far more than just collect rent each month. They choose the best tenants because good tenants mean less work and more income. They keep your rents at the top of the market because more rent means more income for them. They understand the law and keep you from fair housing violations or lawsuits. They have policies and procedures in place that allow them to stop problems quickly before they cost you a lot of money.

yes, you could hire your own employee, but what does that solve? You still have someone managing the property with no experience, no legal training, no knowledge market, or any of the other benefits that a professional property manager brings.

if someone charges you $10,000 a year but earns you $20,000 a year, wouldn't that be worth it? I think you are only looking at the cost without considering the benefits

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  • Dominic A.
    Property Manager · Nova Scotia · Member since 2021 · 78 posts · 52 votes
    3y

    Buildium is very scalable. We started with 20 or so units and had the same priorities. We have since grown from there and handle pretty much everything directly from buildium (I often check it before I check my email inbox in the morning). Certainly not cheap, but our favourite option so far. 

    Stessa is also great, especially if you're mostly focused on accounting and tracking rents.

    There is another software that is free I believe, fairly new...I hope someone will jump in with that. I know they've been mentioning it on the BP podcasts.

    1Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    3y
    Quote from @Muhamed Abd.:

    Your family thinks they are saving money by hiring you instead of a professional, but it's going to cost them money in the end. I work with Landlords all the time that managed their own property until they finally burned out. They gave their properties to me, I turned them around, and now the Landlords are making more money than they ever did before, even after paying my fees.

    Why kill yourself? Hire a professional that knows what they are doing. They have leases that comply with the law and are enforceable in court. They have policies and procedures in place to keep tenants on track and prevent problems from growing out of hand. They understand the market and can get your units rented for market rates. A good property manager will increase the income, reduce the losses, all while protecting your time and sanity.

    The DIY Landlord Book4.7248 Reviews
    WebsiteView Page
    0Reply
  • Muhamed Abd.
    OP
    Member since 2022 · 12 posts · 1 vote
    3y
    Quote from @Dominic A.:

    Buildium is very scalable. We started with 20 or so units and had the same priorities. We have since grown from there and handle pretty much everything directly from buildium (I often check it before I check my email inbox in the morning). Certainly not cheap, but our favourite option so far. 

    Stessa is also great, especially if you're mostly focused on accounting and tracking rents.

    There is another software that is free I believe, fairly new...I hope someone will jump in with that. I know they've been mentioning it on the BP podcasts.


     Stessa is a great suggestion. Buildium is not bad for $50 (unless there is something else I do not know). I have seen others that start at $150 with extra fees

    0Reply
  • Muhamed Abd.
    OP
    Member since 2022 · 12 posts · 1 vote
    3y
    Quote from @Nathan Gesner:
    Quote from @Muhamed Abd.:

    Your family thinks they are saving money by hiring you instead of a professional, but it's going to cost them money in the end. I work with Landlords all the time that managed their own property until they finally burned out. They gave their properties to me, I turned them around, and now the Landlords are making more money than they ever did before, even after paying my fees.

    Why kill yourself? Hire a professional that knows what they are doing. They have leases that comply with the law and are enforceable in court. They have policies and procedures in place to keep tenants on track and prevent problems from growing out of hand. They understand the market and can get your units rented for market rates. A good property manager will increase the income, reduce the losses, all while protecting your time and sanity.

     You make good advice but I kind of wanted to do the software management part because I am kind of the family's techie except I am not sure which software PM use. My family is not new to this btw I just wanted to move into the 21st century over the way they are doing it like in the 1900s.

    I once looked for a property manager and heard the service fees is outrageous 10% and I am not sure if this includes costs of fixing and renovations or legal representation. I am also not sure if they are going to get my any new tenants or just keep leeching on whoever I still have. I also feel the percentage cut is not a fair deal. Suppose I have just 1 property that is rented for $10K , at 10% the PM will be making $1000 just collecting the rent once a month? doesn't sound right.

    I once hired a lawyer in a case that I won and I was paid compensation that was paid in monthly payments and had agreement with him that his fees with be deduced from it. After sometime I realised the lawyer has been continually taking a percentage cut even after his total fees have been covered. After I pointed him to that, he said he will reimburse me next month. Next month he forgot to reimburse me the money he took and I had to remind him again.

    So yeah if a lawyer can do this who is supposed to be defending me, I am very skeptical of letting a PM run the show and I wait as I receive the rent. Especially that there is a lot more money flowing around with a PM. There is also the case in which he can extra charge me for papers and renovations costs. Something that can be fixed for $200 he will do it for $800. What do you think?

    yes its a choice between being burned out and trusting a PM, and the PM fees. If a PM percentage fees reach $5K or more a month maybe I could hire my own employee?! What do you think. Advice is appreciated.

    0Reply
  • Slaiman Atayee
    Real Estate Agent · Washington, D.C. · Member since 2018 · 70 posts · 27 votes
    3y

    I'd highly advise against using something like excel as its prone to manual error plus most of these softwares make it easy come tax time.

    I've had good experiences with Buildium. I think BP use to have partnerships with them to so maybe you can get a promo discount. 

    1Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    3y
    Quote from @Muhamed Abd.:

    A good property manager does far more than just collect rent each month. They choose the best tenants because good tenants mean less work and more income. They keep your rents at the top of the market because more rent means more income for them. They understand the law and keep you from fair housing violations or lawsuits. They have policies and procedures in place that allow them to stop problems quickly before they cost you a lot of money.

    yes, you could hire your own employee, but what does that solve? You still have someone managing the property with no experience, no legal training, no knowledge market, or any of the other benefits that a professional property manager brings.

    if someone charges you $10,000 a year but earns you $20,000 a year, wouldn't that be worth it? I think you are only looking at the cost without considering the benefits

    The DIY Landlord Book4.7248 Reviews
    WebsiteView Page
    3Reply
  • Simon W.Business Member
    Real Estate Consultant · Lehigh Valley PA & New York City · Member since 2013 · 1k+ posts · 659 votes
    3y

    Being a PM and handling a software management is completely two different things.

    10% is not outrageous because PM companies are obligated to check on your properties if anything happens to both Interior and Exterior. They are responsible for evictions, going to court, and other duties that they are liable for. They will keep track of accounting income & expenses.

    It isn't just collect rent and collect fees. 

    $800 vs $200 is a massive difference. You can certainly take the time to find the right vendor who will do it correctly once. You can be on top of the vendor to check the status, you can go inspect the work after it is done. 

    Do you know that PM companies have employees?

    Sure you can go hire your own employees, pay worker's comp,  pay payroll taxes, file your quarterly taxes, pay benefits, take the time to hire employee(s), train them to use your platform, and manage their time. 

    Let us know how much money you think that will take when you start hiring employees and you will need supervisors/managers to oversee them. 

    I feel like a lot of people on BP thinks every tasks in real estate is easy peasy and they can do everything themselves. These type of businesses exist for a reason.

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  • Dominic A.
    Property Manager · Nova Scotia · Member since 2021 · 78 posts · 52 votes
    3y
    Quote from @Dominic A.:

    Buildium is very scalable. We started with 20 or so units and had the same priorities. We have since grown from there and handle pretty much everything directly from buildium (I often check it before I check my email inbox in the morning). Certainly not cheap, but our favourite option so far. 

    Stessa is also great, especially if you're mostly focused on accounting and tracking rents.

    There is another software that is free I believe, fairly new...I hope someone will jump in with that. I know they've been mentioning it on the BP podcasts.

    Avail! "Avail" is the other software

    The above advice is also great though. You need to understand that there is a lot involved in property management, and it's almost certainly going to change some part of your family dynamic. If you're ready for the work (and ready to learn) and you feel like you and your family can set appropriate boundaries and expectations then we're behind you 100% and happy to offer advice. Just make sure you know you're signing up for a lot more than simply staying organized.

    Using something like Stessa to track the books and keep an eye on a PM is an equally good strategy and way to learn. The fact that you're here and asking questions likely indicates your willingness to learn and recognize the scale of what you're taking on...so that sounds pretty promising to me.

    0Reply
  • Muhamed Abd.
    OP
    Member since 2022 · 12 posts · 1 vote
    3y
    Quote from @Slaiman Atayee:

    I'd highly advise against using something like excel as its prone to manual error plus most of these softwares make it easy come tax time.

    I've had good experiences with Buildium. I think BP use to have partnerships with them to so maybe you can get a promo discount. 



    exactly this is what I am here for.
    0Reply
  • Muhamed Abd.
    OP
    Member since 2022 · 12 posts · 1 vote
    3y
    Quote from @Nathan Gesner:
    Quote from @Muhamed Abd.:

    A good property manager does far more than just collect rent each month. They choose the best tenants because good tenants mean less work and more income. They keep your rents at the top of the market because more rent means more income for them. They understand the law and keep you from fair housing violations or lawsuits. They have policies and procedures in place that allow them to stop problems quickly before they cost you a lot of money.

    yes, you could hire your own employee, but what does that solve? You still have someone managing the property with no experience, no legal training, no knowledge market, or any of the other benefits that a professional property manager brings.

    if someone charges you $10,000 a year but earns you $20,000 a year, wouldn't that be worth it? I think you are only looking at the cost without considering the benefits

    Of course I would like to delegate, but for a PM to make me more money means if I am making $20K now. If I higher him I should be making at least $21K otherwise my income is just decreasing not increasing as you mentioned earlier.

    As for the $10K vs $20K it depends. If my total income is $30K and thats a 7% ROI , if I pay a PM 3% now I am left with 4%. Assuming inflation is 2%, I am at 2% money growth. Now subtract legal and maintenance fees, now I am in the negative percentage. If I am calculating this wrong please tell me. Unless the property makes something closer to 14% - 3% for PM - 2% inflation - 2% maintenance I will be left with 7% money growth which is sounds nice but 14% is astronomical number for real estate ROI based on rent.

    Of course I would like to delegate, but for a PM to make me more money means if I am making $20K now. If I higher him I should be making at least $21K otherwise my income is just decreasing not increasing as you mentioned.

    0Reply
  • Muhamed Abd.
    OP
    Member since 2022 · 12 posts · 1 vote
    3y
    Quote from @Simon W.:

    Being a PM and handling a software management is completely two different things.

    10% is not outrageous because PM companies are obligated to check on your properties if anything happens to both Interior and Exterior. They are responsible for evictions, going to court, and other duties that they are liable for. They will keep track of accounting income & expenses.

    It isn't just collect rent and collect fees. 

    $800 vs $200 is a massive difference. You can certainly take the time to find the right vendor who will do it correctly once. You can be on top of the vendor to check the status, you can go inspect the work after it is done. 

    Do you know that PM companies have employees?

    Sure you can go hire your own employees, pay worker's comp,  pay payroll taxes, file your quarterly taxes, pay benefits, take the time to hire employee(s), train them to use your platform, and manage their time. 

    Let us know how much money you think that will take when you start hiring employees and you will need supervisors/managers to oversee them. 

    I feel like a lot of people on BP thinks every tasks in real estate is easy peasy and they can do everything themselves. These type of businesses exist for a reason.


     Sure if you own a couple of tower buildings with 300 tenants in each building delegating would be better but if you own few buildings with 60 tenants maybe keep it in house will save you money. I still do not know is that 10% inclusive of all maintenance fees and legal work , or is the maintenance and legal work added to the 10% because soon my profit margins will thin out real slim.

    0Reply
  • Muhamed Abd.
    OP
    Member since 2022 · 12 posts · 1 vote
    3y
    Quote from @Dominic A.:
    Quote from @Dominic A.:

    Buildium is very scalable. We started with 20 or so units and had the same priorities. We have since grown from there and handle pretty much everything directly from buildium (I often check it before I check my email inbox in the morning). Certainly not cheap, but our favourite option so far. 

    Stessa is also great, especially if you're mostly focused on accounting and tracking rents.

    There is another software that is free I believe, fairly new...I hope someone will jump in with that. I know they've been mentioning it on the BP podcasts.

    Avail! "Avail" is the other software

    The above advice is also great though. You need to understand that there is a lot involved in property management, and it's almost certainly going to change some part of your family dynamic. If you're ready for the work (and ready to learn) and you feel like you and your family can set appropriate boundaries and expectations then we're behind you 100% and happy to offer advice. Just make sure you know you're signing up for a lot more than simply staying organized.

    Using something like Stessa to track the books and keep an eye on a PM is an equally good strategy and way to learn. The fact that you're here and asking questions likely indicates your willingness to learn and recognize the scale of what you're taking on...so that sounds pretty promising to me.


     thanks for suggesting Avail. I thought its more inclined towards big corporates over single investors but I will look into it now. I must say again, we are not new to property management. We own real estate for over 40 years. I am just trying to modernize and organize things because things are growing beyond simple pen and paper and looking at solutions other people are using.

    0Reply
  • Wendy Man
    Member since 2019 · 104 posts · 35 votes
    3y
    Quote from @Muhamed Abd.:
    Quote from @Nathan Gesner:
    Quote from @Muhamed Abd.:

    Your family thinks they are saving money by hiring you instead of a professional, but it's going to cost them money in the end. I work with Landlords all the time that managed their own property until they finally burned out. They gave their properties to me, I turned them around, and now the Landlords are making more money than they ever did before, even after paying my fees.

    Why kill yourself? Hire a professional that knows what they are doing. They have leases that comply with the law and are enforceable in court. They have policies and procedures in place to keep tenants on track and prevent problems from growing out of hand. They understand the market and can get your units rented for market rates. A good property manager will increase the income, reduce the losses, all while protecting your time and sanity.

     You make good advice but I kind of wanted to do the software management part because I am kind of the family's techie except I am not sure which software PM use. My family is not new to this btw I just wanted to move into the 21st century over the way they are doing it like in the 1900s.

    I once looked for a property manager and heard the service fees is outrageous 10% and I am not sure if this includes costs of fixing and renovations or legal representation. I am also not sure if they are going to get my any new tenants or just keep leeching on whoever I still have. I also feel the percentage cut is not a fair deal. Suppose I have just 1 property that is rented for $10K , at 10% the PM will be making $1000 just collecting the rent once a month? doesn't sound right.

    I once hired a lawyer in a case that I won and I was paid compensation that was paid in monthly payments and had agreement with him that his fees with be deduced from it. After sometime I realised the lawyer has been continually taking a percentage cut even after his total fees have been covered. After I pointed him to that, he said he will reimburse me next month. Next month he forgot to reimburse me the money he took and I had to remind him again.

    So yeah if a lawyer can do this who is supposed to be defending me, I am very skeptical of letting a PM run the show and I wait as I receive the rent. Especially that there is a lot more money flowing around with a PM. There is also the case in which he can extra charge me for papers and renovations costs. Something that can be fixed for $200 he will do it for $800. What do you think?

    yes its a choice between being burned out and trusting a PM, and the PM fees. If a PM percentage fees reach $5K or more a month maybe I could hire my own employee?! What do you think. Advice is appreciated.

    You didn't ask this, but in case it is helpful.  Sorry to hear about the lawyer incorrect billing issue.  If that continues to be an issue (the lawyer refuses to refund you the amounts you are due), you can try contacting the state bar.  A state bar can revoke or suspend lawyer licenses for that state, and generally take ethics (including billing) very seriously.  

    0Reply
  • Muhamed Abd.
    OP
    Member since 2022 · 12 posts · 1 vote
    3y
    Quote from @Wendy Man:
    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    3y

    @Muhamed Abd. recommend Buildium also as you'll never find an accountant to keep track of all of it without paying them a LOT.

    You can also look into, RentRedi, TenantCloud, Apartments.com, Hemlane, Rentec.

    Good luck, you'll need it.

    [email protected]248-209-6824
    Logical Property Management4.9451 Reviews
    WebsiteView Page
    2Reply
  • Muhamed Abd.
    OP
    Member since 2022 · 12 posts · 1 vote
    3y
    Quote from @Drew Sygit:

    @Muhamed Abd. recommend Buildium also as you'll never find an accountant to keep track of all of it without paying them a LOT.

    You can also look into, RentRedi, TenantCloud, Apartments.com, Hemlane, Rentec.

    Good luck, you'll need it.


     Thanks for the suggestions I appreciate it. Looks like an accountant costs around $30/hour . If they will do 20 hours work per month for me it will cost $600 month. Not bad.

    0Reply
  • Cheryl Packham
    Rental Property Investor · Surprise, AZ · Member since 2014 · 196 posts · 86 votes
    3y

    Hi Muhamed,

    I understand the paper jungle and keeping up to date on all the things that come with rental properties.  I am happy to chat with you about what I am doing to sort all this out if you want to, send me a message or email. 

    0Reply
  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    3y

    @Muhamed Abd. how much will you pay a PMC at 8-10% of collected rents per month?

    Think about all the headaches they'll take care of over and above just the accounting!

    [email protected]248-209-6824
    Logical Property Management4.9451 Reviews
    WebsiteView Page
    0Reply
  • Melanie ThomasBusiness Member
    Real Estate Broker · San Antonio · Member since 2022 · 1k+ posts · 489 votes
    3y

    I would work to hire a PM company and let the professionals handle it. My advice on rent increases is always raise rent EVERY YEAR, even if its a token $5. Inflation is never zero and tenants need to be trained to expect some increase. Good luck, happy investing! 

    [email protected]
    RentWerx Property Management4.73296 Reviews
    WebsiteView Page
    0Reply
  • Scott Mac
    Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    3y

    You cannot keep track of 20 renters and come up with a way to accurately figure out out who is paying and who is not ?

    This job might not be for you, maybe think about hiring a professional property manager.

    This is a relatively simple task, and the actual management of 20 units will require more specialized knowledge to avoid problems down the line.

    Maybe you can fit in the family business in another position where your strengths can shine brightly (???)

    Just my 2 cents.

    0Reply
  • Muhamed Abd.
    OP
    Member since 2022 · 12 posts · 1 vote
    3y
    Quote from @Scott Mac:

    You cannot keep track of 20 renters and come up with a way to accurately figure out out who is paying and who is not ?

    This job might not be for you, maybe think about hiring a professional property manager.

    This is a relatively simple task, and the actual management of 20 units will require more specialized knowledge to avoid problems down the line.

    Maybe you can fit in the family business in another position where your strengths can shine brightly (???)

    Just my 2 cents.


     I am not sure where I said 20 but its more than 20. I think its nearing 70 of different real estate types (shops, apartments, houses..etc) . I wanted a simple app that organizes this data . All the popular ones seem to be cloud connected ones with extra complex layer of screening tenants and doing the listing for you

    1Reply
  • Muhamed Abd.
    OP
    Member since 2022 · 12 posts · 1 vote
    3y
    Quote from @Melanie Thomas:

    I would work to hire a PM company and let the professionals handle it. My advice on rent increases is always raise rent EVERY YEAR, even if its a token $5. Inflation is never zero and tenants need to be trained to expect some increase. Good luck, happy investing! 


     Its really tough especially with the current market conditions. People look forward to actually pay less. Tell them to pay more and they will be really upset. You can also lose them to the competitor, you do not want to lose 100% of your income because you forced 5% increase in rent. What you say is true but not from the perspective of the tenant.

    Do they get extra 5% yearly in pay to balance the inflation?

    0Reply
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