Do you own your property management company?

Question

It seems like a natural succession for a large multifamily unit owner to also own their property management company.

Agree or disagree? Why?

David Cruice · Answer

Agree.  No one manages your money better than you.  There's also no better way to learn the business from the inside out. Plus it can be a great source of deal flow!

Robert Gilstrap · Answer

Be careful here; as entrepreneurs we all suffer from the fact we see opportunity on every corner. I actually own a property management company and I don't have everything I want in my software so I thought "why don't I just make my own software?"...then last week i couldn't get anyone to cut grass so I thought "why don't I just start my own landscaping business?... and the list goes on and on.

Diego Lopez · Answer

I agree with your first post @Brian Beadle. It all depends on the the investor though. Personally, I plan to do this in the future since I love the entrepreneurial aspect of real estate investing. Managing my own properties and building systems/processes to become the best hands on property manager will help me jump into creating my management company to where I'll be able to offer the same quality service to other investors who don't want that responsibility.

James Wise · Answer

Agree. We started with a private portfolio & eventually expanded to 3rd party management. Today the portfolio is valued around $50M.

Pete Barrow · Answer

We (family business) manage our own portfolio (40+ doors) and once we get to a certain size...not sure yet what that size is...we will probably do some hiring and create a PM company to manage for others as well.

I think it makes a lot of sense to solidify your PM skills as you build up your own portfolio, and then take those skills to the market as well.

Donald S. · Answer

HEY! Don't you tell me what my property is or is not going to drink on the job. Sometimes you just need a cold one. (pfft) Judgy much?

:) All in joke.

Brian Beadle · Answer

I do not disagree David. The only downfall of this would be the shift from managing properties to managing people. I feel many HNW investors buy properties instead of business because it is much easier to manage properties than people.  Your tudor style four-unit on the quiet cul-de-sac isn't going to drink on the job, steal toilet paper and embezzle quarters from the washing machines...

Elenis Camargo · Answer

@Brian Beadle I disagree. Just because an investor owns a large multifamily does not mean that 1) they manage it themselves or 2) if they do manage it themselves that they actually enjoy this and want to handle others' properties. In my case I do enjoy managing my own properties. I only have 2 so it's not like having a large multifamily but I would like to have my own property management company someday. We will see if that changes as I acquire more units.

Mike Palikij · Answer

I do own and manage my own property management company. However, this doesn't mean it makes sense for everyone. I am now investing, flipping, renting, and selling full time so I do have the time to do this. To me, it's all about generating additional streams of income. I only charge 8% to my buyers, but it still provides more than I had before, and it provides a service to my clients.

But for more passive investors, it doesn't always make sense. They wouldn't necessarily have the time, or would rely on their Turnkey provider for manage it for them.

Do you own your property management company?

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