Is it possible to manage a property from a long distance?

Question

Account Closed · Answer

Let me answer from a Property Manager's perspective: There is so much more involved than just collecting rent online and making a phone call to the handyman.

There is a lot of bookkeeping involved in collecting rent, due to the dept. of real estate regulations, as well as making the correct deductions from the rent and processing a check for you.

We take all kinds of calls from tenants that you probably never hear about: They call to explain why their rent will be late, questions about moving people in, calls about someone moving out, calls about questions on their lease, the landscaping, ants they found on the counter, you name it, they are calling all the time.

We also do frequent drive-bys of the property to make sure everything looks ok: landscaping, not too many cars, trash, whatever out front. Talk to tenants about it.

We are dealing with the handyman, landscaper, pool guy, etc. Scheduling them, paying their bills, more bookkeeping.

When rent is late, we make phone calls to the tenants, post notices on the doors, send copies by certified mail, make more phone calls, go to the property to talk to them if necessary.

Plus all the move-in, move-out stuff.

Sorry this is so long. I just wanted to make the point that your property manager is doing a lot more than you see. Most of it is done behind the scene, and believe me, they are earning every dime of the % you pay.

Hope this helps! Michelle

Joel Owens · Answer

You couldn't pay me enough to do property management for myself or anyone else.

It's like the job of being a manager or owner. Everyone thinks it is easy until they see all the stuff going on behind the scenes.

As for being an investor myself I am not going to do 10 an hour work when I making hundreds to thousands per hour transacting deals.

My philosophy and where people get into trouble in my opinion is they do not buy right. They talk themselves into self-managing and take out that expense when factoring a purchase price. After buying and owning for awhile their tune changes and they do not want to PM or life circumstances do not allow them to self manage anymore due to location of the property or time involved.

That's when they get in trouble hiring a PM on the cheap to try and compensate for overpaying in the front end.

I think the funniest thing out there is investors think PM's make all this huge coin. The reality is with systems and processes in place all the brokerage I know that do it have to grow to a ton of doors just to make any decent returns. I have analayzed that business and while the demand is strong the returns and time involved from my perspective are a losing proposition.

This is why I just transact on the commercial side and do my own investments. I want the highest return for the least amount of headache involved.

Paul Timmins · Answer

@Rick C.

You time is too valuable managing. Get a good PM and manage them.

To find a property manager go to IREM.org Search for ARM certified <50 units, >50 search for CPM certified. They passed a battery of tests to be certified.

Get into regular discussions with several PM they are an excellent source of off market deals.

Good luck

Paul

Joel Owens · Answer

Jenkins I do not buy any investment where I am going to have a job.

I have  a job already that I love which is a commercial real estate broker running my own company. I am 38 now but will probably do it forever. There is one guy I saw who is 95 and still goes to work 4 hours a day because he enjoys talking commercial real estate.

Michaela I understand what you are saying. Some areas in Atlanta are rough. Whenever I look at an investment the question becomes how hard do I have to work at it or what do I have to put up with to get that return??

Those PM's in that area want 12% or more which I personally think is justified considering the junk they put up with from tenants. All people need to do is go to eviction court in Fulton county to see in some parts of the inner city what type of tenant base you will be taking on and how they look at obligations and paying their debts. You just need to have your eyes wide open before moving forward and saying " I didn't know it was going to be like this ".

Rich Ferradino · Answer

Can you property manage other people's properties without having a PM license or certification? Is there mandatory training required? I would like to get into PM, and know several people who are in the military PCSing to another state and want to rent out their current homes. I told them I could manage their home for them for 8% (10% is the avg in my area) and they seemed rather satified with it.

Ramon Jenkins · Answer

@Joel Owens , so that mean you manage your own investments ?

Michaela G. · Answer

I self manage by necessity. Was screwed over by1 manager and then by an investor, who I'd known for a long time and who I had asked for help and who tried to run out my tenants, so that he could make a low-ball offer on my properties.

My properties are in a low-income neighborhood in Atlanta and most PM won't work in that area. Their commission is just too low. I found a couple that are willing to work, but they both have minimum fees per door per month, that end up being 20-30% of my rent. And I've also made the experience that some PM make much more money by always getting the 1st month's rent, if they have bad tenants. If you have to evict 3 times a year, they'll get 3 times the 1st month's rent.

So, I've set it up with the help of a friend: All my tenants deposit their rent directly into my Bank account. I have various subs that I can call, if things aren't working right. If they have accounts with Wells Fargo, BofA or Chase I can pay them directly into their account and they can email or mail me the invoice. Or I can pay with credit card or check, depending on their set up.

I have a company to file evictions with.

And if I have a vacancy, I have a friend, who will show it to new tenants. I check them out and she'll get 1st month's rent. I'll also pay her for trips of putting up 3-day notices etc.

So far so good ;-)

Rick C. · Answer

Thanks everyone for the advice. Very insightful!

Scott S. · Answer

I live in Arlington VA but own rentals in Central Oregon.  I pay a property management firm 8% of rent and am very happy with the service they provide and their rates.  I let them fix all issues up to a pre-agreed price and anything over that amount requires they call me.  I had planned on only keeping them onboard until I moved back but I may consider keeping them long term.

Ali Boone · Answer

I wrote an article that hits the exact thing you are talking about- managers ONLY collecting rent, calling contractors, etc. I could do all of that from across the country. I expect at least a little more out of mine.

http://www.biggerpockets.com/renewsblog/2013/01/26/surviving-hell-property-management/

I don't recommend managing it yourself just because of how far away you are and it would be impossible to have an eye on the property all the time. One other article I wrote explaining why/when having a manager is amazing, and required really.

http://www.biggerpockets.com/renewsblog/2013/06/29/property-managers-being-a-landlord/

Is it possible to manage a property from a long distance?

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