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Updated 3 months ago on . Most recent reply

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Tracy Thielman
  • Lender
  • Albermarle, NC
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What Door Count Made Property Management Harder?

Tracy Thielman
  • Lender
  • Albermarle, NC
Posted

For landlords managing multiple properties:

At what portfolio size did operations start becoming more complicated?

• 5 units
• 10 units
• 25+ units

Curious where most investors start feeling the operational pressure.

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Stuart Udis
#3 Commercial Real Estate Investing Contributor
  • Attorney
  • Philadelphia
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Stuart Udis
#3 Commercial Real Estate Investing Contributor
  • Attorney
  • Philadelphia
Replied

There are other considerations that matter much more than the number of doors. How many units are under one roof, and how spread out is the portfolio? Is this A class real estate or C/D class real estate? That matters because true A and strong B assets typically require far less time spent on administrative tasks like rent collection, tenant insurance verification, and routine tenant oversight. Rents absorb more professional vendors who do not need require babysitting. Also far easier to lease these units while also benefitting from lower turnover, particularly where there's barriers of entry.  Condition also plays a major role. Units with newer systems and limited deferred maintenance will generate far fewer service calls and maintenance issues. This also tends to favor the better-quality real estate because that's the real estate that can absorb the cost of whole system replacements whereas the lower tier real estate is subject to continuous band-aid fixes to prolong the useful life of systems despite being economically inefficient. These are the realities of owning real rental real estate. Management burden has far less to do with unit count than other more relevant factors.

  • Stuart Udis
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