Should I self manage a multi family?

Question

Hello,

I want to house hack for my next investment. Don't have all the details worked out yet, but I've heard it's a great wealth-builder strategy and a great way to build more capital for the next investment.

I've just been thinking about whether it's wise to self-manage for safety and privacy reasons. What if I have to evict someone that technically lives under the same roof as me... or simply just sending a "Notice to Comply" I feel could create tension.

Please let me know if you're someone who has self-managed a house hack and was it worth it? Or should I start factoring the expense of a PM?

Thanks!

Drew Sygit · Answer

You can maximize your cashflow by doing STR or MTR in the other bedrooms.

You can even live in the basement and rent out all the rooms to max cashflow.

Jonathan Greene · Answer

Having property management when you are house hacking would be like hiring a cleaner if you owned a cleaning company. No. If you haven't done it before, you want to learn how to be a landlord. House hacking is also way harder to cash flow with mortgage rates, so you need all the profit you can get.

Scott Trench · Answer

I will take some flak for this, but I feel that house-hackers should self-manage. Some folks will say "just tell them that you work for or are related to the owner" or play some other game to hide the truth.

But, the reality of business, and life, is that you will have to face hard conversations and unpleasant situations head-on, if you want to be successful.

Swinging your own hammer, doing your own plumbing, making your own mistakes, screening your own tenants, and otherwise doing it yourself is part of the advantage of a house-hacker. You learn those lessons in a "training wheels" environment, where you can (usually) self-correct any mistakes, and learn how to deal with things. You get to know the property, and the type of tenant it attracts. 10 years down the road, you know when a property manager, contractor or tenant is BS'ing you, or when you have legitimate problem and are being asked to pay up for a major repair fairly.

This is a huge advantage, and it greatly simplifies, and empowers the situation for you to own it, and lead. My tenants knew I was the owner, and manager, the whole time, in all my properties. I tried to deal with them fairly, and never had a major issue (until I got lazy and undisciplined after I moved out).

Aaron Zimmerman · Answer

Agreed. Learning how to landlord is crucial for development. You will save yourself fees.

my recommendations would be to create a Google voice number for all resident communications as well as saying you're the manager, not the owner

Seth McGathey · Answer

@Aaron Zimmerman totally agree with this. It is so valuable to learn to manage. And if you just refer to yourself as the property manager, you can play the "landlord says...". They don't need to know you are the landlord that says that.

But also, I house hacked my single family when I lived there, and I didn't have problems. (Not to say you won't). But I think it is important to make sure you are doing really good checks on people before you move them in so that problems don't arise.

Adam Bartomeo · Answer

We have managed properties while owners are house hacking. I would suggest managing it yourself but a surprisingly large number of owners don't want the tenants to know that they are the owners and want separation.

Daniel McDonald · Answer

Totally agree with Jonathan. Don't waste money on a PM while you're living there. House hacking is honestly not a ton of work unless you accept terrible tenants and buy a terrible house. I don't even know you, but I am confident you will be able to handle managing one property, even after you move out to the next house hack!

Jared Martz · Answer

In my opinion, if you have these worries.. house hacking will be difficult to cash flow as your personal unit would most likely be the unit that cash flows. Also it's not wise to have any tenant know you are the owner, keep your life out of their life. PM's may cost money but will save many potential headaches.

Quinton Brown · Answer

Time is more valuable than Money.....

Jeff Roth · Answer

Hi Andrew in San Antonio, Texas-

Congratulations! You would like to house hack a property, up to a 4-unit, by living in it as your primary residence and putting as little down as possible.

This is a great way to buy investment property but you worry about trying to do it, self-managing, and having tensions with a tenant if you get into a conflict over rent or the lease and wonder if it would be better to plan on having the expense of a property manager to avoid this.

Always advise my clients, who do this, to use a property manager to make their investment as passive as possible and avoid conflicts with people living in the same property as them.

To Your Success!

Should I self manage a multi family?

Most Popular Reply