How do you manage your large multifamily properties?

Question

For those of you who own large multifamily properties, how do you manage them?

Do you hire your own manager? Do you use a 3rd party company? Do you let the manager live in 1 of the units?

What types of maintenance does your manager do, and what do you hire contractors to do?

Scott Krone · Answer

@Patrick Philip  We sold all our apartments.  We do own self storage (apartments without toilets).  We hire one of the largest operators in the country to manage our facilities.  They are responsible within the contract and budget to do the minor maintenance.  Big ticket items need to be presented to us for approval.

Nathan Gesner · Answer

@Patrick Philip you have to define what "larger" means. Are you talking about a 20-unit or a 200 unit? Mobile home park or apartment complex?

Personally, I don't think you should buy something like this if you don't already know the answer.

Nathan Gesner · Answer

@Patrick Philip because it's such a general question. It's like asking, "What do I need to know before becoming a professional basketball player?" Answers could include the fundamentals of shooting and dribbling, shoe selection, contract negotiation, media relations, financial management, and a hundred other different topics. How can anyone possibly answer such a generic question?

There are entire books written on the subject of managing commercial properties. You should read a book to get a basic understanding of the business and then refine your questions to fill in the remaining gaps.

Patrick Philip · Answer

I don't feel that just doing the "legal stuff" is worth 10% of all rents. If that's what is considered "management," then I will gladly do that myself.

But I do not feel like being the maintenance man yet again.

Surely you can understand why I wouldn't want to pay a plumber $225 every time I need a toilet unclogged. Nor would I want to pay an electrician $400 to change a breaker, or even more if it's an emergency call.

I think maybe the best thing to do is just dive in and see what turns out to be the best way to do things.

Patrick M. · Answer

So you want to invest in a 20-200 unit trailer park or 20-200 apartment building.

You don’t want to manage it but you don’t want to pay the going rate for management.

You don’t want to higher a handyman because of a few perhaps erroneously, preconceived, reasons but you are too cheap to pay a professional.

Your reason for all of this is because you want to be free to grow your as of yet imaginary business.

Good luck

Patrick Philip · Answer

I was the property manager for a trailer park for 3.5 years. I did most of the maintenance as well as all the "legal stuff" (screening tenants, signing leases, collecting rent, filing evictions).

If I invest in any properties, I do not want to be the manager.

I understand that many property management companies want 10% of gross rents just to do the "legal stuff" and I feel like that is too much.

I also know that it seems foolish to pay a plumber $225 for a service call just to unclog a toilet, for example.

It seems I am in need of some sort of "Jack of all trades" property manager just like I was. But I must also be sure that he knows what he's doing and be careful especially with him working with electrical stuff. Another problem is that I've noticed that "handymen" are notoriously unreliable and I don't even want to know what would come up on a background check half the time (especially if I ever decide to trust them with the task of collecting rents).

Patrick Philip · Answer

I was the property manager for a trailer park for 3.5 years. I'm not looking to do that again.

But I'm also not looking to pay a plumber $225 for a service call every time I need to unclog a toilet.

I have found that "handymen" are notoriously unreliable. I've also found that licensed contractors are too expensive most of the time.

I did all the electric, plumbing, even some roofing myself. Not to mention all the legal stuff like finding tenants, collecting rent, filing evictions, etc.

I understand that many property management companies simply do the "legal stuff" and want 10% of gross rents. That's too much, in my opinion. I am much more in need of blue collar workers than I am someone to collect rent and screen tenants. That's the easy part.

Thomas S. · Answer

I own a 30 unit and self manage as well as do all repairs myself. Once you streem line your system and get all maintiance/preventitave maintiance completed it is very manageable.

The key is to keep in mind that there are very few real emergencies. My response to most calls is that I will take a look next time I am at the property. I am usually there on a weekly bases.

Patrick Philip · Answer

So why not answer it for me?

Add hotel to that list also.

Nathan Gesner · Answer

In that case, I can't believe you don't already have the answer.

How do you manage your large multifamily properties?

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