Do I need a property manager/company

Cleveland, Ohio
Managing Your Property
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Do I need a property manager/company

Deep Patel
New to Real Estate · Austin TX · Member since 2019 · 4 posts · 3 votes

I'm looking to buy two duplex properties in another state, Cleveland Ohio, and I wanted to see if this is something I would need a property manager to mange. The properties already have tenants, and one of the properties is Section 8 approved which is what I would like to do to all the units. I'm wondering if I need a property manger or a property management company to manage these long term rentals. If so, how much should I expect to pay? I've researched and saw that people have been quoting about a month's rent for management fees for a year, is this accurate? Would love some help here

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Travis Biziorek
Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
2y

Hey Deep, self-managing out of state can be done. 

I do it.

I live in California but have 12-doors in Detroit. That said, I have a very strong network on the ground.

With one tenant being on Section 8 already it will make things easier for you if you wanted to go the self-management route. Then it's just about networking a bit, or calling local service providers when there are maintenance requests.

Anyway, nobody seems to be answering your question about actual PM costs in the area.

In a market like Cleveland you're likely to see three main costs:

1) Tenant placement fee. This is usually equal to the first month's rent.

2) A percentage of the gross monthly rents (usually 10% but you may be able to negotiate to 8%)

3) A lease renewal fee. Some folks will try and take 50% of the monthly rent for that. I think that's obscene. A nominal fee of $150 or so is annoying but reasonable.

Hope that helps!

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  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    2y

    @Deep Patel
    You definitely need a property manager. A typical amount in Ohio is 8-10% of gross monthly rent and one month's rent as a leasing fee. 

    [email protected]614-412-4565
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  • Austin McClainBusiness Member
    Real Estate Agent · OH · Member since 2021 · 347 posts · 602 votes
    2y

    If you're out of state, I recommend getting a property manager. Unless you do real estate full-time, running property management while you do another full-time job will be difficult. 

    [email protected]614-710-4827
    1Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    2y

    You never need property managers until you need them. Don’t wait until that point. They typically charge anywhere from 8 - 10% of monthly rent.

    2Reply
  • Michael Dumler
    Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes
    2y

    @Deep Patel, find and work with a PM who is familiar with section 8. If a PM says they're familiar with section 8 but can't explain how the system operates, provide contacts, or answer any of your questions, then don't work with them. Section 8 tenants can be great but you need to have the correct management in place. As noted above, most PMs will charge around 8%-10% of monthly rent. 

    2Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    2y
    Quote from @Deep Patel:

    I'm looking to buy two duplex properties in another state, Cleveland Ohio, and I wanted to see if this is something I would need a property manager to mange. The properties already have tenants, and one of the properties is Section 8 approved which is what I would like to do to all the units. I'm wondering if I need a property manger or a property management company to manage these long term rentals. If so, how much should I expect to pay? I've researched and saw that people have been quoting about a month's rent for management fees for a year, is this accurate? Would love some help here


     I would recommend getting one

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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  • Jim Rivell
    Investor · Philadelphia, PA · Member since 2022 · 106 posts · 56 votes
    2y

    I'd agree with the above and say it would be wise to look around to hiring a manger. Especially since you're out of state and won't have boots on the ground. I also see PM being anywhere from 8-10% plus/minus depending on area, amount of units, type of rental etc.

    0Reply
  • Travis Biziorek
    Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes
    2y

    Hey Deep, self-managing out of state can be done. 

    I do it.

    I live in California but have 12-doors in Detroit. That said, I have a very strong network on the ground.

    With one tenant being on Section 8 already it will make things easier for you if you wanted to go the self-management route. Then it's just about networking a bit, or calling local service providers when there are maintenance requests.

    Anyway, nobody seems to be answering your question about actual PM costs in the area.

    In a market like Cleveland you're likely to see three main costs:

    1) Tenant placement fee. This is usually equal to the first month's rent.

    2) A percentage of the gross monthly rents (usually 10% but you may be able to negotiate to 8%)

    3) A lease renewal fee. Some folks will try and take 50% of the monthly rent for that. I think that's obscene. A nominal fee of $150 or so is annoying but reasonable.

    Hope that helps!

    3Reply
  • Trevor Ray
    Investor · Austin, TX · Member since 2023 · 8 posts · 8 votes
    2y

    Hi Deep, I had something very similar in Cleveland I recently bought a duplex and have a section 8 tenant in place that just moved in this week. There was a lot of back-and-forth and multiple inspections when my PM was placing the tenant and it’s not something I would’ve wanted to do without a PM in place, especially the CMHA inspections.

    There is paperwork to complete for each tenant and inspections, and if the unit fails inspection, then work has to be done within a certain time and you need a contractor to do it and schedule a new inspection until you pass.

    One month's rent is about accurate. I’m paying my PM a 5% monthly fee and they kept one month's rent for finding the tenant. They have been good with section 8; I know not everyone does section 8.

    1Reply
  • Angie Russell
    Property Manager · Member since 2022 · 40 posts · 27 votes
    2y

    Hey Deep, Anything is possible. Of course you can do it. I just cringe at some of the things I see inexperienced landlords do though. So just make sure you look up Ohio's rental statutes and the rental statutes in the city you buy in. Try and use it as a guide. Maybe find a helpful local PM there that you can ask questions to if needed. I am in South Florida and would be happy to answer questions to an investor in hopes that they will scale and one day need my professional services or simply recommend me. 

    Hope that helps. Call if you have questions 847-275-3327

    0Reply
  • Jad Boudiab
    Real Estate Broker · Cleveland, OH · Member since 2015 · 255 posts · 248 votes
    2y

    @Deep Patel depending on where you’re buying in Cleveland, you should definitely consider hiring a Property Manager.

    Areas with a lot of section 8 inventory and demand are typically rougher and a bit more challenging to manage. You’re not buying a B class asset, you’re more likely in a C- or D area with a lot of variables and unforeseeable challenges that come up.

    Find a team that’s experienced in the type of asset you’re buying, and entrust them with operating and managing while you focus on asset managing and finding more opportunities.

    0Reply
  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    2y

    A property manager with a real estate license must work for a property management company with a real estate brokers license.

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  • Andrew Weiner
    Property Manager · Cleveland, OH · Member since 2020 · 268 posts · 315 votes
    2y

    Can you self manage yes, will you need "Boots on the ground" yes, and having consistent boots on the ground isn't easy.  Like @Eliott Elias said, you don't need the help until you need the help, and then it can cost significantly more than any savings.  In many cases investors using professional management companies end up netting more post management fee's because managers may get more in rent, screen prospective tenants better, have more regular rent increases, have better rent collection practices, faster eviction process, etc. 

    Section 8 is actually much hard to self manage in my opinion.  You need to pass inspections, that can be difficult completely depending on which inspector shows up that day.  You need to sit and wait for the inspector and could have someone waiting for 4+ hours just to find out they canceled and never called to tell you.  If your tenant takes down a CO detector you could get a 24 hour emergency reinspection.  Section 8 sounds good but there is a lot that goes into it from the management side and its getting harder here, not easier.

    When you say that the house is "Section 8 approved" that isn't really a thing here.  You get the tenant first, then you get inspected and that is on a per unit basis.  In the same house one unit can pass and one can fail.  After the tenant is in you get reinspected annually or if the tenant complains.  You need to pass the inspection each time or they will stop making payments.  If a section 8 tenant moves out and get another section 8 tenant, you will need to do the inspection all over again. 

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Deep Patel:

    I'm looking to buy two duplex properties in another state, Cleveland Ohio, and I wanted to see if this is something I would need a property manager to mange. The properties already have tenants, and one of the properties is Section 8 approved which is what I would like to do to all the units. I'm wondering if I need a property manger or a property management company to manage these long term rentals. If so, how much should I expect to pay? I've researched and saw that people have been quoting about a month's rent for management fees for a year, is this accurate? Would love some help here

     YES 100% the fees are meaningless, I pay 8% and have everything taken care of, my phone never rings. Do you want the calls for repairs, then what, who's going to repair it for you? You just going to go to google and hire someone, well kiss your money goodby. It took me years to get a team, I have done 100s and 100s and 100s out there. Last winter it was - 20 for about a week, pipes busting, you want that call on Christmas morning? Its about 100 bux a month, again meaningless, 

    Good luck 

    1Reply
  • Benjamin Carver
    Real Estate Agent · Raleigh, NC · Member since 2019 · 303 posts · 288 votes
    2y

    Yes only way around that is airbnb style where the cleaners act as eyes on the property. Even then you'll need boots on the ground for emergencies and whatnot. But section 8 ltr, absolutely.

    0Reply
  • Christopher Slowey
    Real Estate Consultant · Cleveland, OH · Member since 2023 · 27 posts · 10 votes
    2y

    Best bet may be to find a vertically integrated team to prevent arranging and following up on several 3rd parties from a few states away.

    0Reply
  • Benjamin Carver
    Real Estate Agent · Raleigh, NC · Member since 2019 · 303 posts · 288 votes
    2y
    Quote from @Bob S.:
    Quote from @Deep Patel:

    I'm looking to buy two duplex properties in another state, Cleveland Ohio, and I wanted to see if this is something I would need a property manager to mange. The properties already have tenants, and one of the properties is Section 8 approved which is what I would like to do to all the units. I'm wondering if I need a property manger or a property management company to manage these long term rentals. If so, how much should I expect to pay? I've researched and saw that people have been quoting about a month's rent for management fees for a year, is this accurate? Would love some help here

     YES 100% the fees are meaningless, I pay 8% and have everything taken care of, my phone never rings. Do you want the calls for repairs, then what, who's going to repair it for you? You just going to go to google and hire someone, well kiss your money goodby. It took me years to get a team, I have done 100s and 100s and 100s out there. Last winter it was - 20 for about a week, pipes busting, you want that call on Christmas morning? Its about 100 bux a month, again meaningless, 

    Good luck 


     Very random but 4,000+ posts on here.. you are a legend sir

    0Reply
  • Vadim F.
    Investor · Member since 2020 · 337 posts · 213 votes
    2y
    Quote from @Deep Patel:

    I'm looking to buy two duplex properties in another state, Cleveland Ohio, and I wanted to see if this is something I would need a property manager to mange. The properties already have tenants, and one of the properties is Section 8 approved which is what I would like to do to all the units. I'm wondering if I need a property manger or a property management company to manage these long term rentals. If so, how much should I expect to pay? I've researched and saw that people have been quoting about a month's rent for management fees for a year, is this accurate? Would love some help here


     Absolutely need a PM. It will cost you 8-10% of the rent. $100mo to not deal with any headache in market you don't know or live in is worth the cost. 

    0Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    2y
    Quote from @Deep Patel:

    I'm looking to buy two duplex properties in another state, Cleveland Ohio, and I wanted to see if this is something I would need a property manager to mange. The properties already have tenants, and one of the properties is Section 8 approved which is what I would like to do to all the units. I'm wondering if I need a property manger or a property management company to manage these long term rentals. If so, how much should I expect to pay? I've researched and saw that people have been quoting about a month's rent for management fees for a year, is this accurate? Would love some help here


     If you've got to ask the question, yea you need one.

    1Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Deep Patel:

    I'm looking to buy two duplex properties in another state, Cleveland Ohio, and I wanted to see if this is something I would need a property manager to mange. The properties already have tenants, and one of the properties is Section 8 approved which is what I would like to do to all the units. I'm wondering if I need a property manger or a property management company to manage these long term rentals. If so, how much should I expect to pay? I've researched and saw that people have been quoting about a month's rent for management fees for a year, is this accurate? Would love some help here


     Yes, do not even think about going it alone, it will not end well. 8- 10% of the rent, its meaningless, 

    1Reply
  • Raj Kota
    Member since 2019 · 4 posts · 3 votes
    2y
    Quote from @Trevor Ray:

    Hi Deep, I had something very similar in Cleveland I recently bought a duplex and have a section 8 tenant in place that just moved in this week. There was a lot of back-and-forth and multiple inspections when my PM was placing the tenant and it’s not something I would’ve wanted to do without a PM in place, especially the CMHA inspections.

    There is paperwork to complete for each tenant and inspections, and if the unit fails inspection, then work has to be done within a certain time and you need a contractor to do it and schedule a new inspection until you pass.

    One month's rent is about accurate. I’m paying my PM a 5% monthly fee and they kept one month's rent for finding the tenant. They have been good with section 8; I know not everyone does section 8.


     Hey Trevor Ray, Can you DM me the property manager contact, I am looking for a property manager for a triplex in Bedford area.

    0Reply
  • Raj Kota
    Member since 2019 · 4 posts · 3 votes
    2y

    @Deep Patel, Did you end up with a reliable PM? I am in similar situation any recommendation on PM Contacts are helpful.

    0Reply
  • Albert Barrios
    Member since 2023 · 9 posts · 4 votes
    2y

    Hello! I have done this same thing recently in Los Angeles CA. 

    HIred 1 PM and outsourced offshore for accounting/admin work to help save cost from big purchase. 

    0Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Deep Patel:

    I'm looking to buy two duplex properties in another state, Cleveland Ohio, and I wanted to see if this is something I would need a property manager to mange. The properties already have tenants, and one of the properties is Section 8 approved which is what I would like to do to all the units. I'm wondering if I need a property manger or a property management company to manage these long term rentals. If so, how much should I expect to pay? I've researched and saw that people have been quoting about a month's rent for management fees for a year, is this accurate? Would love some help here


     Of course, you do, If not go it alone and let us all know how it turns out :)  The fees are meaningless. It will cost you 10x when things go wrong. I live on the beach and do all my biz there, 

    0Reply
  • Chantal Thomas
    Member since 2020 · 30 posts · 8 votes
    2y

    @Deep Patel Did you ever find a PM in Cleveland? If so, I'd love to hear who you used. 

    2Reply
  • Bob S.
    Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
    2y
    Quote from @Deep Patel:

    I'm looking to buy two duplex properties in another state, Cleveland Ohio, and I wanted to see if this is something I would need a property manager to mange. The properties already have tenants, and one of the properties is Section 8 approved which is what I would like to do to all the units. I'm wondering if I need a property manger or a property management company to manage these long term rentals. If so, how much should I expect to pay? I've researched and saw that people have been quoting about a month's rent for management fees for a year, is this accurate? Would love some help here


     Of course, you do. If not it will not end well. You must understand how to navigate CMHA, deal with inspections contracts etc BTW, how do you know you are buying in the right area and for a good price. I am happy to provide advice. So many overpay, 

    0Reply
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