My rental property is in a different state outside of the state i live. Currently i have a property manager, but i lose 1 month rent for the leasing fees, to both listing agent and showing agent, plus, i also lose 8% of my rent every month to the property manager
Is there any strategy or best practice in doing away with my property manager yet being able to service my tenants if any situation ?
Wow @Mani Swagath , that is a tall order if you want to have a close watch over your property.
I use PM's for all my properties and they are my best friends! Not literally but they are the hands and feet of my business. They make my life so much easier and all I do is cash my checks from them while they do all the work. :-)
With my PM's I figure these expenses are the cost of doing business.
Now, what you can do, and I do not suggest it, is to find a leasing agent who will list, show, and lease the property to the tenant. You will pay the leasing fee but then you have the tenant pay you directly. The problem is you still have the leasing fee but you would not pay the monthly PM fee.
Now your property is much more hands on. If there is any issues, the tenant calls you and you have to find someone to deal with it. Those calls for repairs may not actually be needed to be done by a contractor for a high cost when the PM could take care of it much cheaper.
So, all that to say, I personally use PM's because they make my life easier and I pay them well to do so. Just like my Accountant, I love paying my PM's because they make my life easier and the work they do makes me money every month!
Hope it goes well for you!
@Dustin Heiner : Thank you Dustin. I totally agree to the advantage of PM. My strategy is to buy relatively new homes, so there is hardly any repair, if not zero, and the PM get all the monthly fees for doing nothing. Ie i wanted to check here. If i had slightly older homes as rentals, i would always go with PM
Sure, that makes sense @Mani Swagath .
Then yes, you could be onto something there if you don't foresee any issues with the property after it is rented. It does seem like they are not doing anything.
I like having a PM because they are there any time of the day to watch over my property. I found that the more properties I have the better rates I can negotiate with the PM too.
I personally don't see how to successfully show the property, collecting apps, and rent the property without a leasing agent though. Too many problems come to mine without someone one on the ground there you can trust to show the property and not let anything bad happen to it.
Maybe someone does know how to lease the property without a leasing agent and will post here.
@Dustin Heiner : I should have been clear on this. Am totally open to using a leasing/listing agent, I need to absolutely. However, once through with that, i don't want to waste the spend on monthly fees for property management since my rentals are new homes or max of 5 year old homes
@Mani Swagath if your buying A class this can be done. I have a bunch of A class in Mississippi that we self manage ( well I am down to 5 from high of 12) they were all new construction I paid 160 to 225k for each... they only broke even on cash flow and maybe a little positive if I used management they were break even or a little negative. I bough them for go zone tax purposes which at the time were awesome and saved me huge amount so personal income tax when I bought them. so I was not looking for anything but break even since I made about 25k each cash in my jeans when I bought them.
I am a retiring landlord so selling them off.. But I self managed those .. I did have to pay a fee to lease.. but then took it from there and just had a great handy man.. and since these were all brick with scored concrete floors.. 700 plus fico white collar tenants I have only had one bad one in 8 Years . although the bad once went off the rails and destroyed the home. I was lucky the insurance company covered it did 50k in damage. most of the time insurance won't cover tenant abuse as we know.
If you are in the mid west deep south rust belt Detroit in C class then no way you can do these from afar you will loose your @@@SSS
if you consider self managing there are software programs to use. Also, out sourcing office staff. Always sign your own checks, but it may save you to go this way.
@Mary Davies : Thank you. Am familiar with the software, but how do i outsource staff ?