Becoming a property manager

[Paul M.]

As a landlord, accountant and hands on rehabber, I've thought about becoming a property manager, in my market that would be for 1-4 unit properties most likely for now.  I'm looking for advice on the legal and insurance implications of doing so, or general advice.   I would have no employees, except someone to do things when I'm on vacation.   I notice there is no property managers forum on biggerpockets!

[Kristen Williams]

I think it depends on they type of deal you negotiate, your market, and what type of properties you will 'inherit'.  If the owner was unable to properly screen and manage the people who moved into their units, and the property itself is always in need of maintenance and you're always dealing with accounting issues - red flags all around, and not worth the low percentages.

Although, that is often an issue in itself; dealing with owners who self-managed, were proud of it, and then when hiring out, they suddenly want to low-ball your services because you are now a liability, biting into their return -  yet knowing how many hours and issues you will be undertaking.

PM is very enjoyable, however, if you communicate fully beforehand. Talk to the owners, get it in writing, and stay in contact. Don't just give monthly reports or handle the problems, but schedule quality short calls - break it down into a particular property for example. Do it right as you're giving their P/L and expense reporting, tell them how well or how at risk the property is in, earn their respect, and be proactive. Get them great renters out of the gate, or rebuild the rent roll as they move or are evicted (the bad ones) then you will spend much less time and you will find your earnings much better because you've made his business efficient, profitable, and therefore, profitable for you.