Say NO to Property Managers...

Tomorrow I will close on 5 more units which will bring my total owned to 11! Although I can't wait to have  a few more keys hanging on my wall I do sort of worry that things are getting a bit more complicated. After all, when I only had one unit it was so easy! Even up to six wasn't bad. But now I'm in the double digits and I start to wonder...what happens when I hit 20? 30? What if I have to move or deploy? What if I have to...resist...aaaugh! What if I have to pay a property manager?

Well I suppose if I were an absentee owner I wouldn't have much choice, would I? Well, maybe I would. If one considers the functions of property management one would see that most of it could be done from afar. To wit:

1. Maintenance. I love to do my own maintenance. Not just because I loathe the $75 service call to fix a loose toilet seat but also because I just like to be hands on. But if I weren't around could I still do it? Why not? Why couldn't I just have a plumber, electrician, and handyman on speed dial and send them over whenever a tenant called or submitted a work order? I can pay vendors online and I can give them each a key. I suppose there's a trust issue here but it's a long hard road if you don't trust people. Just like anything else you've got to find good people to do this for you so this is a relationship to develop before leaving.

2. Rent collection. My favorite part of being a landlord. Actually, I've never taken receipt of rent since I don't want tenants coming to me on all different days. How I do it now is I give them a deposit slip and tell them to drop their check at the bank or to do an ACH transfer from their bank to mine. It's worked perfectly for the past couple of years but I'm in the process of changing how I do it. I signed up for Property Ware last week and they have a service that will give my tenants a tenant portal with the ability to pay online. Once that's set up we'll be good to go!

3. Emergencies. I suppose this is where I would lean on my maintenance team but what if it were something minor like a lost key? Further, how would I handle...

4. Vacancies. How would I do the final inspection, clean up, and showing to prospective tenants? Well, at this point I'm stuck...I need someone on site and there doesn't appear to be any way around it. I would also need someone with a power of attorney to do certain things on my behalf.

So it looks like I might want to hire a part time assistant to handle items 3 and 4. I wonder how cost effective that would be. Hmmm...

Well, if I have 11 units grossing $7,150/mo then I'm looking at paying a property manager 10% of that every single month just for the priviledge of having them onboard. It's an extra $200 a pop for them to advertise each rental and they like to tack additional charges on the bill for things that don't seem like they should cost so much but mysteriously do. Consider, too, that they don't get paid unless there's a tenant paying rent so they're motivated to get someone (anyone!) on a lease. The odds that this person is going to trash your property is much higher and, to add insult to injury, the property managers charge you extra to clean up after the mess left by the bad tenants!

It's so true...Nobody loves you stuff as much as you do. And this is why I hate property managers. They'll charge you an arm and a leg and what do you get?

So would it be worth it to just hire a part time assistant? Maybe do it hourly or just a set rate. Of course this person should be someone that you trust--that goes without saying. So in my case, if I were to find, say, a school teacher or stay at home mom to do this for me I could pay them $500/mo and I'd still come out way ahead.

The obvious flaw in this plan is that this person would have the "keys to the kingdom" and there would be all kinds of potential for things to go horribly wrong. But if the right person were found then this could be a win-win situation.

So I guess I'll keep refining this plan and keep you all up to date with what I decide. In the meantime, what are your ideas? Is anyone an absentee landlord? What have you found to be effective ways to manage from afar? Fire away, y'all!