Do You Self-Manage or Hire Help?

Question

MTRs are simpler than STRs — but still a business.

Some investors self-manage.

Others outsource messaging, cleaning coordination, or guest screening.

At what point did you decide to get help (or not)?

Randall Alan · Answer

@Nick Copland

Hi Nick,

I'll preface this with the fact that I am a long-term rental guy.. not Mid Term... but most still applies....

I think the answer to your question is a function of your abilities and availability. We self-manage 37 doors.  My wife and I worked full time 8-5 corporate jobs until we had over 20 doors (at which time one of us quit and started managing real estate as our full time job.)

I have written before about how one of the best things we did was to subscribe to a cloud-based tenant management system to handle some of the day to day 'heavy lifting'... though that might be an overstatement... overall managing properties is pretty easy. The one we went with for long term rentals was Rentec Direct.  I'm sure there are also MTR platforms out there as well.  It costs us about $2/door/month.  It collects our rent, screens our tenants, broadcasts our properties for rent, has full accounting and reporting.  It applies late fees, lets tenants pay by credit card, or ACH payments, and also has a tenant facing portal where they can see their statement of their account, as well as report maintenance issues and pay their rent with the click of a button.  There are many of these platforms, and most people like whichever one they choose.

This mostly leaves showing your properties, maintaining your properties, turning over your properties as the other major items that require your time.  You have to judge your skill set / comfort level / and availability as to these items.  Our solution is to handle as much as a we can ourselves, because it is really the only way you can make more money once your tenant is onboarded (that is to say - money you don't spend is money you get to keep.)  So if things arise that we can do, and we want to do them, we will.  If it's a septic system, or an A/C, or something else we either don't want to do, or just don't have the skills, we hire it out.  But on a daily basis, the straight-up managing of the properties is really pretty easy.  If you have a decently maintained property, I would say you would expect to hear from a typical tenant from 0-2 times a year, and most of their concerns can be solved with one 5 minute phone call to a vendor (AC / plumber / electrical tech).  For turn-overs we may hire someone to clean the unit.  We can do basic maintenance... door knobs, paint, ceiling fans, re-wiring an outlet, etc.  Again, as soon as it crosses our threshold of not wanting or having the skills to do something, we just farm it out.

With that said, paying a full time property manager to handle your property is just a huge drag on your profitability.  If you figure that a financed $1,500 / month rental nets you $300-$400 a month, and you are paying your PM the standard 10% fee - that is $150 that goes to them, not you.  Put that in percentage terms of your profit and it is 37-50% of your monthly profit you are giving them for not too much effort.  Plus, a PM often gets a huge chunk of the first month's rent for turning over a property for you.  That could be $1000-$1500 more you pay to the PM in a year.  On that $400/ month figure - if you extrapolate that to a year, and add in the $1,500 for turnover, plus $150/month for the other 11 months that is $3,150 of your $4,800 in potential net profit... which equals 65% of your profit!  So that is the strongest argument to try and do it yourself.

Hope some of it helps!

Randy

Andrew Street · Answer

We self-manage most of it, but brought in help once the mental load became the bottleneck—not the number of doors.

The moment you’re reacting instead of running systems, it’s time to get help—even with MTRs.