question for full time landlords

[Stephen Leblanc]

I currently have a full time job and I have 20 rental units. I manage these units myself and do most of the maintenance myself. I do hire out when time is a factor. I find the hands on approach to work best for me, to keep an eye on my units and make sure everything is running smoothly. I can replace my 9-5 income with the cash flow of the 20 units. I am currently looking for more deals and figure I can look after about 40 units before I will need to quit the 9-5 job, for time reasons. My question is.... how do you have time away from the business when you have 20-40 units. If I want to travel for a month, is it reasonable to think I can manage the business by phone, or is this just dream land. Do you hire someone to look after them for you. I think I'm too cheap for that. What do you guys do?

steve

[Michael Rossi]

EXACTLY! Furthermore, that 10% often doesn't include the fee for the initial lease-up and certainly doesn't account for the ineffeciency of a property manager in hiring maintenance.

For example, one of the most common calls a landlord gets is for a water leak. The vast majority of these leaks are absolutely NOTHING - a loose hose; a worn-out Fluidmaster valve; a broken toilet chain (to the flapper); a worn out flapper; a worn-out sink gasket, etc, etc, etc. When a paid property manager gets a "leak", he's going to call a plumber or a handyman. If he calls a plumber, you're going to have a $100 bill for the plumber to spend 5 minutes tightening that hose or replacing a flapper valve. If the property manager calls his handyman, it might cost a little less IF THE HANDYMAN FIXES IT RIGHT THE FIRST TIME.

The point is that the real cost of a paid property manager is NOT 10% of the gross rents or 10% plus the initial lease-up fees. The real cost is those fees plus the thousand other inefficiencies that property managers cause.

In answer to Stephen's original question - YES, you can MANAGE your business by phone if you OCCASSIONALLY travel. I do that every time I travel. I answer the phone and call an appropriate maintenance person if needed before my return or simply schedule the non-emergency maintenance for when I return. If you're going to be traveling all the time, that won't work because you won't be able to show rentals; do move-ins; and other important routine management tasks. Furthermore, I don't trust ANYONE to collect the rents. I do that myself.

Mike