Why do bigger multifamily buildings use third party management?

[John Liaaz]

I notice a lot of large apartment buildings in my area (Toronto) are being managed by third party property management companies. Why would a company that owns a building like this decide to outsource management instead of hiring in-house? 

[Greg Dickerson]

Originally posted by @John Liaaz:

I notice a lot of large apartment buildings in my area (Toronto) are being managed by third party property management companies. Why would a company that owns a building like this decide to outsource management instead of hiring in-house? 

The reason is management of large properties requires serious expertise, talent and it’s a completely separate and different business. Some companies do manage their properties in house especially the larger outfits. Personally I like to outsource the management and focus on managing the managers and letting them do their job so I can focus on finding more deals and scaling the business. Managing property in house can be a distraction and a liability.