So You Want to Manage Your Own Properties
Maybe You Shouldn't.
So you own some properties. Maybe 3 duplexes, a 6 unit and 12 unit building, or maybe just a duplex, possibly you went bigger and you started with a 20 unit property. The point is you own these unit(s) and you decided “I can save some money and do a good job managing my own properties”. The simple fact is that chances are you are wrong! Managing your own property is a lot of work and takes a lot of time. Are you really good at managing your property(ies), or do you just think its a good idea? Is property management your strength? Could you use your time more effectively? Are you befriending your tenants or running your business like a proper business? Do you aspire to be a property manager? These questions and more are things that you need to think through before you take the deep dive into managing your own properties.
...it's not your highest and best use of your time.
Let us go ahead and talk about each of these points, I want to see if I can sway you to think about this another way. I want you to think about paying someone to manage your properties for you. Yes, I said it, pay someone to “do something that I/you can do”, why would I do that you might be asking. Most of these reasons are listed above but in my mind the biggest reason is that it's not the highest and best use of your time. And we all know the famous line that “time is money”.
You think that you are good at managing your property(ies) and you very well might be. But are you as good as a manager that spends all of his or her time doing this? She spends each day perfecting the management art, creating and using systems and discovering the proper way to run a real estate asset for others. She knows the ins and outs of the management software, knows the local tenant/owner laws, knows the best contractors in the area. Are these all things that you know? There is a lot that you might know but these things are always changing, to me it seems like you need to dedicate a lot of time to manage the property properly and if you consider property management your strength then maybe you should build out a management company. But if it is not a strength of yours then you should not be wasting the time, it's not worth it for you or your business!
If your managing your own property you are finding contractors, coordinating jobs, advertising, going to court, evicting tenants, interviewing and showing prospective tenants apartments plus way more! That takes a lot of time, you could easily fill each of your days completing all of these tasks, and if you do that how will you have the time to look for new properties, raise the necessary money and build out your business? You need to have a team, one person is not enough to do everything, leverage the experience of others.
...are you a property manager or an investor and entrepreneur?
Are you running your properties like the business that they are? This is a big one and I have seen the effects of self managing first hand. It's easy to get caught up in your tenants problems, chat like friends and be willing to help them out when they have money problems. This is not necessarily an issue but can easily turn into one. Of course you want to be nice to the people that rent from you but there is a difference between being nice and giving away apartments or late fees and being taken advantage of. Always be sure to stick to the rules, treat it like a business and treat everyone equally. The thing is if you are not managing your properties you don't need to think about this!
There is a lot to think about but the main thing that you need to decide is if you are a property manager or an investor and entrepreneur? Don't worry about saving a few bucks here and there, look at your goals and follow the path that most easily brings you closer. You only have a finite amount of time, leverage other people's experience, follow your passions and reach your goals!