For New/Small Investors, include you as PM in your calcs/ROI?

Question

For new and smaller investors, when you use BP Rental Calculator, if you will be doing your own property management, do you set Property Management Fees to 0% and accept the Cashflow and CoC as true? Or, do you set it to PM Fees to 10% to see the "true" Cashflow and CoC numbers?  Or, in general, when an REI says Cashflow and CoC, do they always assume that those numbers include 10% PM fees?  I don't want to force numbers to justify the property, but for new and small investors, I want to make sure I'm not missing out on deals, either. Thanks

Josh Stamper · Answer

Hi Nick, thanks for the advice and perspective. I hope to pass them off at some point, so I will leave the PM in.  After looking at so many ways to find ways to make a deal work and then make sure I'm not forcing numbers, I really appreciate having advice from a person that has been there, done that. Thank you!

Nick Peters · Answer

Always include PM, even if you self manage. For two key reasons: i) you may self-manage today, but what about tomorrow? You may not want to manage properties your whole life; ii) What if you buy more properties and scale? Are you going to continue to self manage?

Including PM is the right thing to do when planning your investments.

Aaron W. · Answer

@Josh Stamper Do you plan to manage the property yourself forever? Is there a possibility you may want to have someone else manage it in the future?  Personally, I would add PM costs just in case I don't want to manage it any longer and know it will still cash flow positively.

Best of luck!

Josh Stamper · Answer

Thanks! Yeah, my plans are to pass them off after I have enough, so that makes sense.  Appreciate the advice!