Management co. Or NOT?

Question

I currently have 3 rental properties and just finishing up 2 more rental property renovations to bring to market. I currently use a management company which charges 10%. All my properties rent for $800-1000/mo. I'm considering trying to manage them myself as that will put another $400/500 a month in my pocket, however I don't really know that much about it other than the basics, & I can fix most small problems myself. I just don't know the real VALUE of property management other than the convenience of it... Also I would like to note that my plan is to include at least one additional rental every year... W/ a final goal of 20 to 30 rentals

Any input or recommendations are greatly appreciated.

Bryce

Any input or recommendations are greatly appreciated.

Bryce

Stephen Haynes · Answer

As a property manager Myself I would say Try it out to see if it is something you like to do start with the properties you do not have a management company on yet if you like it then take over the rest. The only way you will know if it is worth it to you is to try it out yourself. Best of luck I do hope you choose to try it out for a while if not permanently. Some people self manage their properties very well others not so well. After a few months of self managing you will know if it's for you or not.

Barbara G. · Answer

Are you doing any of the maintanence work now or is the managment company hiring the maintaence and Handi Man people?

5 properties are self managable especialy if you can do some of the maintanence yourself.  They are more  self managable if they are close to your primary residence and not more then an hour away?  When you self manage you also can be more proactive.  $5,000 or $6,000 a year is a good amount of money.

Are these 5 single family investments or are they multi family and how far are they away from your home?

Positive answers will make self managment more of a positive option.

Marina Shlomov · Answer

Hi Bryson,

I have written many articles on this topic on my blog. I am a property investor as well as the owner of a property management company. Started out just like you, with a few rentals, and a couple of years later found myself managing over 50 properties. There are up and downs to property management, but I am lucky that we also own a construction company that does all the maintenance on now more than 50 homes. I focus on the Atlanta market, but the strategies are applicable to any market.

Good luck.

Marina

Ashley St. Gelais · Answer

Hey @Bryson Dawson!

Great question. It all comes down to your goals and preferences.

Will it impact your life if you are getting calls during off hours? Will it impact a full time job if you have one?

If you are growing quickly, perhaps you can negotiate with the PM company for a bulk discount?

If you are going to take these on yourself, there are 2 major items i'd suggest.

1) Be 100% confident that you understand the tenant/landlord laws in your area. Follow them to a T.

2) Have a tenant approval process in place.  A bad tenant can wreck any returns you were planning on.

Hope this helps!

A