Property Management

[Scott Kelley]

Hey all, I'm just curious if any of you do property management on the side, or as a piece of your business? I'm just wondering because I'm thinking of adding a side business doing exactly that. I just typically have found most property management companies to be difficult to work with at best and I think I could provide a much better service.

If you do provide the service, what have you found to be the pluses, minuses and challenges?

[Chris Clothier]

@Scott Kelley 

We started our own management company about 9 years ago when the choices here in Memphis were so bad.  In the end, we just wanted better service than we were getting for ourselves and our clients.  We were sending about 100 properties a year to the management company at that time.

Today, we are managing just over 2300 properties in Memphis, Dallas and Houston all sold by us to our clients.  We do very little management for other people or companies.  If we do, they have to renovate up to our standards.

The challenges of starting your own management company will mirror starting any company - people!  We found really great people first and then added them to our team without knowing what they would do or the role they would fill.  So we built the company around our hires instead of building the company and hiring people to do jobs.  The culture and buy-in to the idea of "providing a much better service" as you put it are going to be the biggest obstacles you will have to over-come.  

The biggest plus comes from providing a great service and then having more and more of your clients add properties to your management roll and refer other investors to you.  This is really a great business when it is run like a business.  When it is simply run as some after-thought service that investors are going to need, then it will probably not be very fulfilling and you will not enjoy doing it.  So the plus comes from reaching scale and having a recurring revenue stream each month to build your business and support your full time effort.

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We literally believe that we are the best property management company in the country and even though there are no awards for it, our whole team strives for just that each day.  When we inter-act with other management companies that do something different than us and we think they do it better, we are quick to make adjustments and sometimes even pull a 180 and implement ideas that we think are better.  That is how you build a good management company.  

You can and should start one if you have a solid marketing plan in place or agreement with a company to provide you with management clients.  If you do not, it may take a little more time to scale, but when you reach critical mass, this is a really good business for those that provide a "much better service".  Good luck to you.