The Compelling Reason to Consider Hiring a Property Manager For Your Rentals

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“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take your money and go to Las Vegas.” –Warren Buffett

That’s it. That’s the reason. Get it?

No? OK. Let me explain.

If you’re an investor, as in you define yourself by your ability to put money to work for you, you want the money to do the working. Investing your money in one thing, but turning around and investing your time and energy into that same thing isn’t “investing,” it’s “a startup.” It’s also a whole bunch of things you’ve been told never to do, like “putting all your eggs in one basket” and being “all work and no play”–because believe me, being your own property manager is ALL the work.

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What is “All the Work”?

A property manager, as we like to say in our office, wears a lot of hats. In order to manage property poorly, you have to be able to:

  • Negotiate a decent rate on a repair job with a surly contractor.
  • Convince a mostly broke person that paying his rent is more important than buying steak (seriously, that’s why they made chicken, guys).
  • Keep track of at least three and as many as a dozen separate streams of incoming and outgoing money, some commingled and some not, across anywhere from four to a dozen different accounts, while being able to provide proof at any given moment of what went where, when, and why.
  • Advertise property inexpensively and effectively without sacrificing your ability to get a tenant who will pay a reasonable rent and not destroy the place.
  • Avoid signing a mostly reasonable-looking tenant who will destroy the place if you do sign him/her.
  • Functionally communicate with and alternately placate and motivate tenants who have essentially opposite goals and priorities without letting either one take too much advantage of the other–or you.

Related: 7 Surefire Signs You Need to Enlist the Help of a Property Manager

And that’s just your run-of-the-mill, no-frills property management that can passably perform the job. If you want to be a top-of-the-line, advanced property manager, you need all those skills at their peak level, plus the abilities to:

  • Navigate a court case, remaining professional and calm while bat-guano crazy tenants make absurd claims about how horrible of a person you are and how you ate his dog, and that’s why he’s late on his rent for the third month in a row.
  • Comprehend the effects that the large-scale and local-scale market movements are having on each client’s properties, and predict how that will affect your ability to charge, your future costs, and the client’s risk levels.
  • Work with finicky city inspectors to bring buildings that were just last week 70% hellhole into the realms of livability without spending too much of your client’s reserves to get it inspected and approved.
  • Comprehend the systems used by your writers, inspectors, agents, photographers, builders, vendors, and so on well enough to troubleshoot each of those systems and help guide them toward the solutions they need to help you keep doing your job effectively.

Related: The 6 Non-Negotiable Habits of a Top-Notch Property Manager

In short, being a property manager is an enormous investment in time, effort, and energy–and you, the investor, rightfully should be directing all of that toward furthering your own future income streams. Hire a property manager not because you need one to deal with your couple of investment properties, but because you intend to turn those couple into a dozen someday, and having the right PM on your side will make that possible.

Have you hired a property manager yet? Why or why not?

Let us know with a comment!

About Author

Drew Sygit

Drew is the manager of Royal Rose Property Management, a fairly high-tech solution for Detroit Metro area property owners & investors.

6 Comments

  1. Bennet Sebastian

    Good advice, thanks for sharing. In an effort to squeeze out a few extra percentage points of ROI it’s easy to try and perform many tasks that could be done better/faster by a professional. But you make a good point about thinking bigger. Reminds me of a quote I heard recently, “don’t let small successes get in the way of big successes”.

  2. Andrew Syrios

    Three’s certainly a lot of nitty gritty work in property management and a major opportunity cost to doing it yourself. But I would definitely be cautious looking for a PM, there are a lot of bad ones out there. Our experience has been almost uniformly terrible with them. The only exception manages a 12 unit building with a HAP contract. And given the rent is paid by the government, I’m not sure exactly how much credit we can give him.

    • agree with andrew–we had bad experiences with two different pm companies–as far as expecting them to negotiate good rates with contractors-that doesnt happen in our experience–they simply keep a list of plumbers electricians etc. and if something happens call one of them, take their commission and send the property owner the bill–as far as screening tenants went, that was bad too–if theperson had a job & ok credit, they would rent it–I like to meet the people, and eyeball the situation- when its YOUR house , you are much more circumspect about who lives in it.

  3. micheal reinier

    As a property manager in Charleston, SC, I manage around 50 units through out the city and have been doing so for over 15 years now.The biggest problem that I have encountered thru the years is dealing with cheap clients (owners). If a problem develops in a unit, deal with it and quickly, don’t take 5 days to find someone to replace the water heater because your trying to save $100.00. Imagine if it were you and how you would feel with out hot water. As for tenants, pretty simple pay your rent or get evicted, rents due the 1st, late fees after the 5th and eviction on the 10th, non-negotiable. Hope this helps

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