Become property manager before investing in rental properties?

Question

Jeff B. · Answer

Farm yourself out as an apprentice/intern for $1.95/hr (kidding) to get experience.  Somewhat like the so called bird-dog, start simple and learn the steps:

• taking applications
• screen tenants
• place advertisements
• do the data entry for payments
• do the billing
• go onsite with the Pro to do move-out inspections

By this time' you will have a background in the BACKEND / in-house portion of the business.

You'll be heads and shoulders above a great many.

Leon D. · Answer

So, you're saying that you want to manage other people's property, and make yourself liable for anything you mess up, so you can learn what to do (or not) before you invest yourself?

If you have no experience in real estate (let alone property management), why would someone hire you?

John Davis · Answer

As a owner, I would want someone with some experience in the buzy, pending cost and how the agreement is stated I would give you chance. As long as I had several escape clauses...

Amy Good · Answer

Jeff Beard Great advice for us newbies. I am doing that now and I am learning a lot!

Adrian Mata · Answer

Here I'm kinda bored and I'll give you some information so you don't have to earn your own bumps and bruises working for somebody else....

PMing really isn't rocket science if you start out on the right foot.

The property...this will be the biggest difference between owning your own place managing somebody else's. Your property needs to be GOOD and DURABLE. Understand what pipes you should be using...PEX over copper. Make sure your electric is all up to code. Have a good understanding of the life left on your roof. How's your basement if you even have one? How old are you appliances? Flooring!!! Good floors can minimize turnover costs in the long run. Try allure vinyl flooring or laminate over carpet! Carpet are great in the bedrooms for comfort though. Get good high quality carpet pads! This way you will just replace the carpet during turnover. What's CRUCIAL to understand is your costs and what will hit your pocket. A PM(typically) won't care. They'll just call you "You need to replace the water heater". If you don't know your place in the beginning, you'll get plagued with a lot of fun calls at the highest costs. It won't be fun.Tenant screening....if you follow the rules here you'll be fine. I don't know what kind of property you're renting out. If it's "not the best", then you're probably not going to get somebody with great credit, 3X income, and no criminal record. As a newbie you might think that a PM will be the best in these situations....but guess what! NOT really :-). If it's your own property, you could use experience in growing a "gut" (IE trusting your gut) for applicants OR you just keep it vacant until a great tenant comes along. A PM will just keep it vacant until a great tenant comes along or they'll pass the "meh" tenants onto you the owner but offer not guarantees.

Dealing with tenants....if you have a good one you won't have a problem. You'll need to understand how to have STANDARDS. Rent is due on ____. Rent is late on ____. As a newbie, you'll try to reinvent the wheel and get burned. Then you'll go back to understanding how important it is to have standards when you're dealing with people.

Know the eviction process from beginning to end in your area. Even if you never use it, it'll reinforce how important standards are because you'll need a timeline to get your place back.

PMs typically deal with the cards their dealt and try to make the best of it by getting all clients on the same page (instituting standards). If you have a bad property with issues and an owner that doesn't/can't spend money on it then you're going to get bad tenants. The margins are awful so they really don't make a lot of money unless they have tons of good tenants, or they're able to put lots of fun surcharges on repairs and rehabs. IE the contractor charged $1000 so they put 20% on top of that for $1200 for "managing the project".

As an owner, you'll have control of your property and a true insight into costs and keeping them manageable. IE hiring your own handyman and building a relationship vs a contractor at the highest rate.

Some tenants would rather deal with a manager (they don't like seeing the owner's BMW) some would rather deal with an owner (the person that has the final say so ...ie..."can I get a new fridge?" you get a yes or no right there vs a "let me ask the owner" ). You'll get stuck in the middle as a PM vs an owner your get a front row seat.

I could go on haha but if you want to PM to learn how to manage a property you really just need to understand that you need a standard on paper that you follow to a T. The only real leniency is something that won't put you out.

Robert Melcher · Answer

Going to work for a PM company sure helped me....of course the degree in engineering and Marine Corps officer training might have helped too....

This is not rocket science, but it is about managing people and their assets effectively.

You have to know how to hold your ground and perform consistently.  The rest is details.

The only way to master a skill is to practice it.  I recommend a PM company spot until you're up to your comfort level.

Logan Sherwood · Answer

I meant going to work for a pm company! Do you still think that is a bad idea?

Frank Dimino · Answer

Normally you self manage your own properties and eventually start managing others if you are good at it.  Being new it would be very difficult to build up clients as a PM with no experience.

As was said earlier, try to be an apprentice for one, not just anyone though find a reputable PM and try to help them out, even free if need be. It's the knowledge and experience you are gaining that you really want. Try to learn the correct honest way for a reputable PM.

Amy Good · Answer

@Leon D.I understand that working for a PM company is the key to gain the knowledge and experience. (Someone is giving me the chance with their company)

I think newbies are great because you can manage and teach them to how you do things so that it wouldn't be at "your expense". Newbies need a chance to gain experience to become that seasoned PM. I know if I were in the position to help a newbie I would be more than happy to.

Leon D. · Answer

@Amy Goodperhaps you misunderstand. I'm not opposed to @Logan Sherwoodgaining property management experience. I'm only asking, if I'm a property owner already (which I am), why would I hire him, or you, or anyone, if they don't have any experience managing property? I don't necessarily want someone learning at my expense.

Going to work for a PM company though, might be a different story.

Become property manager before investing in rental properties?

Most Popular Reply