Property Mgmt Company for first property?

Question

Hey guys,

Do you think it's beneficial to sign up with a property management company for your first rental, or should you wait until you have a few under your belt.

Perhaps this is a subjective issue.  Interested in hear your opinions.  Thanks!

Christen G. · Answer

I agree with @Cameron Tope and @Drew Sygit - get in there and DIY until you have systems in place that you can hand over to someone. You'll save yourself money, you'll learn how you want your business to run and then when it's time, you can hand it over and set up the person you hire for success. Best of luck!

Drew Sygit · Answer

@Kyle Abramov if you have the ability to self manage for 6-12 months, the experience would serve you well in to ways:

1) learning about all the REAL hassles of property management.

2) understand what level of service your property needs to be successful.

Both of these will be invaluable in screening a property manager company and managing them.

One word of caution - be careful with your expectations. We've seen many DIY owners that over managed their rentals and then expected a PMC to also do so.

Cameron Tope · Answer

Hey Kyle,

I highly recommend folks manage their first rental themselves. Then once they get more than ~5 hand it over to professional management.

You'll learn a lot from handling your rental that will make you better at managing your property manager.

Joshua Powers · Answer

Good question. I'm new as well, getting closer to purchasing my first property. I have most of my ducks in a row including financing (still waiting on one bank for an answer), agent, cpa, mentor, and much education through bigger pockets podcasts and books. I have properties that I have been analyzing and looking at. But... I work full time and would like a property manager. I am including this in my calculations (8% estimate) but I cannot find property management companies in this area. So that 8% is just a guess using what I've read and heard about. I live in Big Flats, NY and am looking to invest in Elmira, NY to start. I think that this market may be to small to support property management companies, or I'm not looking in the right places.

This isn't really an answer to your question, it's more of an affirmation that it's a good idea to use a property manager if you think you need one and the numbers work. Finding one is another question I'd like to have answered. Good luck to you!

This isn't really an answer to your question, it's more of an affirmation that it's a good idea to use a property manager if you think you need one and the numbers work. Finding one is another question I'd like to have answered. Good luck to you!

Calvin Ozanick · Answer

I tend to lean towards property management at all times. Of course, I am a manager but there is merit to this decision as well. A manager dedicates full time effort to your property, where you most likely cannot or do not want to. Hiring the right property manager gives you 2 means of growth. 1- your investment becomes truly passive and you do not have to worry about managing the property. 2- a good property manager will help you capitalize on your investment and guarantee the proper growth going forward.

Brian Buckley · Answer

@Kyle Abramov as everyone else has said before, it largely depends on your situation and comfort level.

I’ve owned two multi-family properties and both of them I managed myself. One of which that I currently own is six hours away from home for me. I built up contacts with trades and installed a lockbox on the home so that even if my residents can’t be home to let them in they still have access without anyone being home to let them in.

My current rental is a two-family and rents for $995 each so the gross monthly rent is $1,990. I can’t see the value in giving away $190 a month for a service that I might not even use. If I had 5 or more of these properties and maintenance and turnover became unmanageable then I would consider using their services.

Nicole Heasley Beitenman · Answer

I highly recommend self-managing the first rental so you know what to expect from a PM company.

Randy Gutierrez · Answer

I would say manage it on your own especially if you have spare time. You will learn quite a bit, things like setting up a second line, setting up a mailbox, drafting late rent notices, having prepaid mail etc. I had to chase my inherented renters for rent a few times, that process in itself you will learn things. The solution there was to switch them to electronic payments which was a night and day difference, they haven't been late since. They were paying with money orders originally. Only other issue in the 8 months so far was a leaking toilet which I called a local plumbing company for. Mind you this property is 2 hours from me, I have only been there once so far. I will be there within the next couple of week though for an inspection.

My point is you will gain some valuable insight and experience from doing things on your own. Also everything I mentioned is not to be perceived as monumental, honestly writing a 5 page essay at midnight in college was a more daunting task.

Kyle Abramov · Answer

Thank you everyone for your input. I am reading all of your responses.

Mike L. · Answer

@Kyle Abramov

Hi Kyle, I too chose to use a management company on my first 4 unit but at the same time I’m staying hands on to some extent at least until I feel comfortable with the management company. I think without experience you should strongly consider that or be ok with the risk that your money/property not being managed how you would like (though my default is to defer to the mgmt company’s recommendation as nitpicking/questioning everything won’t make for a good mutually beneficial relationship).

For example, I mow the grass for now to keep an eye on things/save a little money since it’s close by, take furnace filters to tenants, review repair orders over $x, review detailed financial statements monthly and go along to meet contractors for larger repairs so

I understand the pros and cons of the different options. I like that balance as I can learn faster/sleep better at night than being completely hands off without having to be at the mercy of the phone ringing. Longer term as I grow I’ll probably scale some of that back.

Property Mgmt Company for first property?

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