Self Manage Your Properties
Every property manager needs to be managed. PMs are the most frustrating thing about the business, because even the best PM won’t be as effective as a skilled owner-operator. In a tight market where cashflow can be tough to come by, it’s the PM factor which puts most deals out of reach for investors in the 1-12 unit space in our market.
It’s not so much the fees and lease up commissions, it’s the unknowns regarding maintenance and repair pricing. I used to have a PM contract on a 30 unit building in Saint Paul, we actually made most of our profits off the air filter contract at 12k/year. A previous vendor had bid it at 12k, we saw this when we took over and thought “hmmm we can take care of that..”. I had another PM tell me recently that his biggest profit margin activity is swapping fire detector batteries. These are the things a self-manager doesn’t think of when underwriting to add PM.
Everyone should self manage for as long as possible IMO, and by “everyone” I mean the 99% of us who own under 5 properties. Get to know the buildings and their quirks, the best lease schedules, the difficult neighbors, the best tenant sources, the boiler system, etc. If you don’t, you’ll be paying $100/hr or more for vendors to figure everything out, as it can take a year or 2 to stabilize a new deal.
- Adam Tafel
