Is it worth it to bring your Property Management in house?

[Dan K.]

Two years ago I brought property management in house in my business.  I made this decision after I realized that property managers don't work for me. Instead, they work for themselves.  Sometimes our interests intersect but sometimes they don't.  Looking back this was one of the best decisions I made in real estate. Now I hire people who work directly for me and this has allowed me to save tremendous amounts of money.  Please note that I'm not saying I self manage. I still don't communicate with most of my tenants but I pay an employee (s) to do that. The difference now is that the employee works for me, is accountable only to me, and I have total control over my investments.  This is a very different scenario than what I previously had with a property manager 

I was curious if other people have made this leap, and what their experience was.  

Please not that I am in no weigh impugning the work of property managers.  My last property manager was someone I respected and we parted on good terms.   Property managers helped me get started in real estate and without them, I wouldn't be here today. 

[Nathan Gesner]

Thanks for sharing, @Dan K.

I think it depends on one's goals. If the investor wants to be truly "passive" then they need someone else to  manage the properties. They hire a QUALITY property manager and completely rid themselves of a job. A good PM knows more about managing rentals than you do. You should be able to hand things over and walk away with very little time spent checking reports to verify things are operating smoothly.

In your case, you've created a job. You have to hire someone, train them, and then regularly supervise them to ensure they are doing things the way you want. This gives you exactly what you want (assuming you know what you are doing) but it requires much more time.

I also have to wonder how good of an employee you're able to find. A professional will cost 10% of rent income collected but you don't spend time advertising, interviewing, hiring, training, and daily supervision. The only way you could find someone cheaper is if you compromise on quality or have a lot of doors. Maybe you hire someone for 5% of rent income collected but how much time did you spend advertising, interviewing, hiring, training, and supervising?

I'm curious to see some real numbers and how this is working for you when comparing apples to apples.