Starting a Property Management Company

[Adam M.]

Hello BP! I live in Fort Collins, CO and the rental rates are super high and I've lot of complaints about property management companies around here. I also own property in town so I've done my research and everyone is charging anywhere from 8-11% gross rent with additional fees tacked on here and there. From my research, I'm guessing average rent is at least $1400/mo.

I have PM and real estate investing experience and think there's a good opportunity to serve the community and make good money at the same time. I understand you need to be licensed and under a broker, I already have that figured out. I've already built a team of skilled handymen, plumbers, HVAC, etc. 

I've read all of the discussions on here and would love some updated input or motivation to help me kick this thing off! Here are few of my questions: 

• On average, how long does it take to obtain 50, 100, 150 doors?
• How many doors can one person manage before needing to hire help?
• What are the biggest challenges when starting?
• Good incentives to get new customers to sign up and earn their business?

Thanks everyone!

[Jeff Copeland]

@Kim Meredith Hampton - I agree! In my first year as a property manager, I had a dead tenant, a live rat in a toilet bowl, a marijuana dealer in one of my units (not legal here yet), rats in the attic, a flooded crawlspace...I could go on and on. In most cases, my owners were not even aware of the problems until they were already dealt with. 

I tell my property owners all the time - you can absolutely do this yourself. But the learning curve is steep and I'm years ahead of you...I have systems in place to deal with this stuff that will take you years to develop yourself. It's a question of how you want to spend your time. Most of them absolutely see the value and have much more productive ways to spend their time (like buying more properties!). 

And buy and hold investing becomes more scalable when you have a property manager. Say you could manage 10 of your own rentals by yourself. That's great...you don't need a property manager. 

But what if you want to scale up and own 30, or 100 rental properties? 

Who is making more money and building more wealth: The investor self-managing her max of 10 rentals and saving 10% on the management fees...or the investor who owns 25 units and pays a property manager 10%?