Can my neighbor be my property manager?

Question

Is there anything to be careful of (legally) with paying my neighbors (that I trust) to be my property manager when I move out of my house hack?

To be clear, I have no intention of them being in charge of finding/screening tenants, managing leases or collecting rent. I only want to have them be responsible for things like landscaping, shoveling snow, being a handy man for minor maintenance issues around the house, etc. Everything else I plan to take care of from a distance.

I do not think I see any sort of issue with this, but want to make sure I know where the line is between what I can have them do, and what I would need a licensed professional PM for.

Thank you!

Pamela Sandberg · Answer

Something else to be aware of, legally:

AZ statutes have a "handyman exemption"  for maintenance that is under $1000 and "casual in nature". Anything beyond this requires a licensed contractor. Failure to do so is both a crime on the part of the unlicensed handyman AND can be a problem for you if and when you sell the property. (And, has been mentioned, could lead to liability if tenants are injured by work done by an unlicensed handyman.)

So my advice is to feel free to hire your neighbor to do maintenance and handyman work, but be VERY CAREFUL that his work doesn't exceed the scope of the Handyman Exemption.

Kenny Dahill · Answer

Hi @Matt Anderson, great question!

In Arizona if I understand correctly, unlicensed individuals can even show properties and talk about the property.  However, they can't talk rent or financials.  You would need to be very clear they are NOT to even discuss rent, if they ask then they should redirect the question to get in contact with you.  I believe large MF complexes will have unlicensed people do the property viewings and then the licensed PM's will handle all the financials.

It's similar to a timeshare sales pitch.  They have individuals who tell you all about the amazing package, but they can't tell you the price.  You need to be licensed.

You'll want to investigate some more, or hopefully somebody will confirm or correct me.  When I got my license a few years back this was mentioned a lot in our classes.

Matt Anderson · Answer

@Lynn M., you're right. The correct term would be maintenance person, and I would be self managing from a distance. This is a better way to put it.

@Alex S. the thought, for the short term, is to reduce costs by self managing as I learn more about being a landlord after moving out of my house hack. I really am not going to be asking them to do more than landscaping and simple maintenance issues. The rest I plan to take on myself. Not very 4 Hour Work Week of me to start, but I also want to learn the ropes myself before I start taking on the idea of identifying a reputable PM that I trust with my property. I am sure my plan will evolve over time.

Alex S. · Answer

You can hire him to do landscaping etc.. but why do you want them to be your property manager?

Lynn McGeein · Answer

If they are not handling money, leases, or screening tenants, then it's more like you are hiring a maintenance man, not a property manager who must be licensed in your state, I believe.   But if your neighbor does not have a business license and insurance, you may be open  to more liability for injuries or damages caused by his performance, either to tenant or tenant's guests, or if neighbor injures himself while working on your property.