Can you hire a Management Company and Still be Profitable?

[Robert Marek]

My dad owns a 24 unit building, and 2 four family buildings in NJ. He has always managed it himself, performing most of the labor, but he’s getting to the point where he does not want to do that anymore.

He has always said that it is not cost effective to have a property management company take care of this real estate. Therefore, it appears that the only option is to sell it.

I would like to take over, but I have a full time job and feel I cannot do both. I would be happy to quit and run the real estate full time, but my parents insist it is not possible to own these buildings without also holding a full time job. For as long as I can remember, all my parents have done is work full time for an employer, work on issues with the buildings, and sleep.

So I ask the small time owners with a similar number of units, is it possible to have a management company for this sized portfolio, or does everyone in the same situation also do all the work themselves? Of course, my parents need an income from these properties. How large does a portfolio have to be for it to make sense to hire a property management company? 

[Account Closed]

I agree with most of the posters.  I've also found that part time owners are not charging market rents and maintenance tends to be lacking.  A full time job and life just get in the way of managing a portfolio efficiently.  I started to invest in real estate because I wanted passive income.  I found my properties, completed due diligence, completed updates and repairs, and then managed them.  There was nothing passive about it.  I've since hired a property manager and am much happier.  If you can swing the fee, I'd turn it over to a professional manager.  Just keep a close eye on everything.