To manage or not to manage? Or what if I just...?

Question

So I was thinking about cutting off my PM and managing the other unit in my duplex myself. I figured since it's only 1 unit I've got to manage , I might as well go ahead and learn and do it myself and save money in the meantime till I get my 2nd property (then, I would NEED a PM) I then considered the fact that I could let my PM JUST collect rent, enforce late fees, evictions etc. I can take the work orders/requests. I assume that by taking on the work orders myself I could save a lot of money because I'd be avoiding the maintenance and repair fees my PM charges that seem to be the BIGGEST expenses I have through their service. If I decide to do this I'll just be paying them the straight 10%. What do you guys think about this idea?

Account Closed · Answer

You shouldn't have after-hours emergencies that often. Just handle those yourself. It won't normally require you to be there. It's usually handled with telephone calls. For instance, "Help! My toilet is overflowing!"You tell them how to shut off the water to the toilet. Tell them to mop up the water and you'll call a plumber to deal with it tomorrow. No, sorry, there's nothing you can do until the morning. Require your tenants to carry renters insurance with a loss of use rider. Then, if they can't use the apartment because of some problem like toilets, their insurance will pay for the hotel bill. And this is what you tell them if they insist they must go to a hotel when their toilet is non-functional. "No problem. This is what that loss of use rider was for in the renter's insurance I required you get. So, if you can't live without a toilet until I get the plumber out there, hopefully tomorrow, you can call your insurance company to arrange for a hotel for tonight.""But, by law you have to provide a working toilet! Or the place isn't habitable!""True, but the law also allows me a reasonable amount of time to get it fixed."Then, you call your plumber who goes and deals with the toilet.If they call saying "The house is on fire!" You tell them, "Then hang up and dial 911" Then go on to the part about the insurance.The only real difference with you going in person to deal with the toilet and calling a plumber, is that it would be cheaper for you to plunge/snake the toilet yourself. But it's not required.

Judy Lintus · Answer

To learn how to manage, you should read "The Book on Managing Rental Property" by Brandon & Heather Turner. It's a must read if you want to self manage. Then you can decide if the management company is worth the money.

Account Closed · Answer

I don't expect you'd find a PM willing to do what you want. PMs generally make money when there are problems. Take away their control over problems that they can profit from, and you remove their profit.Just manage it yourself. It's not that hard. If you are willing to learn the laws that pertain to your business, you should be able to handle it yourself.I love the Nolo Press books:http://store.nolo.com/products/landlord-tenant/lan...I used their California contracts and forms, even though the owner could use free apartment association contracts and forms. The Nolo Press ones are much simpler for tenants to understand.

Erin O'Connor Smith · Answer

I started making a profit once I cut the property managers loose (and the bad tenants who cost me the most money.) You can do it!

Max T. · Answer

Just manage it all. With systems in place You don't need a manager until +50 units.

Andrew Johnson · Answer

Jonathan Perez Are the charges that you are seeing a cost-plus markup on services or do you think that the PM is using overpriced vendors? In some cases (I know this is the case where I own) there are different standards as to what is a "normal fee structure" and deal points are negotiable. I also wouldn't downplay the fun of random calls (or door knocks) from tenants about weird issues at weird times. The tenant now has two points of contact which seems like it shouldn't be a big deal but can create some "who should I call?" aspects.

Ray Harrell · Answer

Also, my PM has allowed my property to stay vacant for two months and called last night saying they have an agent showing the property. I thought that was my PMs job to advertise and show the property?!?!?

Ray Harrell · Answer

So what would I need in place to self-manage?1. Education about Section 8 and Chicago Housing Authority.2. An appliance repair person (I have someone in mind).3. Someone to respond to after-hour emergencies (not sure who to enlist for this).4. Snow remove and Lawn Care (I have someone in mind for this).5. A handy person for regular maintenance, drywall, painting, etc. Ideally someone familiar with Section 8 and CHA requirements.Am I missing anything? I'm going to start working on putting this team together.

Shaun Patterson · Answer

@Ray Harrell That's harsh if your doing better accounting work then your PM.

Ray Harrell · Answer

I would love to manage my own property but it's clear on the other side of the city AND I don't own a vehicle. I really just want someone to respond to emergency calls and a handy man. I can do all the accounting myself. Hell I do it anyway because my PM makes so many mistakes.