How Many Properties is TOO Many to Self-Manage?
If you really had to ask, then you probably have too many properties to self-manage already!
As a DIY landlord, have you ever found yourself thinking: Why am I doing this? When will this all get easier? Are stocks & bonds this much work?
The answer to this question varies from landlord to landlord. Some DIY-ers are capable of managing 20-30 properties on their own without feeling overwhelmed (or are willing to endure the stress if it means they get to maintain full control), while some find the process of dealing with their tenants rewarding. Others may struggle with managing just a handful of properties, or have reached the point where tenant headaches have taken all the enjoyment out of doing it themselves.
So, which category do you fall into, and how can you tell when it’s time to consider hiring a professional property management company?
To find out, simply ask yourself the following questions:
- How much free time do you have? Is landlord-ing your full-time job, or are you doing this on the side? It’s possible to manage several properties with only a few hours of work each day, but the more your portfolio grows, the more time-consuming it will be to manage them well. Have you reached the point where you don’t have time left for your family, friends, or hobbies? When was the last time you took a vacation? If you’re self-managing dozens of properties and working overtime (like 70 hours a week) to manage them, you probably have zero free time left anymore, so going with a professional property management company might be the only way to reclaim some of that time.
- How much of your time are you wasting? How many hours do you spend on menial tasks, like driving to each location and handling maintenance issues? What about waiting for two more hours because the plumber was late, or wasting three hours because the prospective tenants didn't show up for a viewing? In addition to taking up your time, if you have properties located far away from one another, it could become physically impossible to manage them all effectively without some additional help.
- Is self-managing stressing you out? Whether property management is something you do alongside your main career, or has become your full-time job, it’s a demanding role that requires a high level of personal organization to succeed. The more properties in your portfolio, the more difficult it is to manage them all, and many landlords feel overwhelmed from constantly dealing with tenant issues, repairs, and requests.
How is the stress of self-managing affecting your personal life? Do you find you spend less time with your family and friends because you’re taking care of these issues? Is your spouse mad because you go out at 10pm on a Sunday to deal with a tenant call? If you feel like you’re in over your head or close to burning out, then it’s probably a sign you’ve taken on too many properties to self-manage.
- Are you learning from your mistakes? Your level of experience and organization skills will also determine the amount of time spent on managing your properties. If you know what you’re doing and have excellent systems in place for staying on top of payments, tenant communications, screening, and maintenance schedules, then you might find self-managing a large volume of properties relatively easy. However, if you’re less organized or are unused to dealing with a variety of potential issues that can arise, it’s much easier to get overwhelmed or let things slip through the cracks as your portfolio grows.
One of the most painful parts of being a landlord is having to learn from making expensive mistakes - like going through a lengthy eviction process because you didn’t properly screen a tenant. How much is it costing you to make those mistakes? If the answer gives you a headache, then it might be time to hire a pro to handle these management aspects for you.
A good rule of thumb is to figure out a cost-benefit analysis, looking at the amount of time and money you spend self-managing versus by hiring a professional PMC, and how much you could make if you spent your time focusing on other things. For example, if you get paid $40/hour at your full-time job, why would you pay yourself less than that to self-manage your properties?
Ultimately, every landlord is different, and the ability (and desire) to make property management your full-time job varies from person to person. Some are totally comfortable with handling as many properties as they need to, while for others, even one property can be too much to self-manage!
Landlords, how many properties do you feel comfortable handling by yourself? What was the deciding factor when you first chose to hire a PMC?
Image Courtesy of: Pierre Blaché