To use a property management company or not?

Question

Hello, I'm wondering if I should use a property management company or not? I'm mainly interested in the aspect of how to acquire and market to tenants. I have the capability to handle the application processes, evictions (if necessary), etc., but am wondering if there's a good way to market to potential tenants?

Any advice or help is greatly appreciated.

Anna Swartz-Lopez · Answer

@Chris Hepner if you have a separate entity holding your property, then you are on the right track! I can't tell you how many investors I speak with who do not take the time to protect their assets properly. I was just trying to point out that a good property management team can be an important part of asset protection.

Finding a good property manager is often the most difficult part of RE investment, and if you have a system to do it yourself and are willing to take that on, you may save yourself tremendous costs there. Just be sure to cover your bases on the insurance and legal side of things. But it sounds like you are moving in the right direction, so keep going strong!

Laticia Braxton · Answer

@Chris HeppnerIt's my pleasure to help Chris!

Chris Heppner · Answer

@Laticia Braxton I really appreciate the advice and help!  This is extremely helpful

Chris Heppner · Answer

@Ethan Jacobsen Awesome, thank you for the help!  Really appreciate it!

Laticia Braxton · Answer

If you're mainly interested in marketing & leasing, a lot of PM companies will parcel that out, for a fee (typically a full month's rent).  You should ask as you're interviewing.  There are also tenant placement companies, that's all they do.  Marketing is not difficult.  Use FB Marketplace, IG, Zillow to start.  There are also other cost effective marketing platforms available.

What you may not have thought of yet and may find difficult is managing showings, if you have a job and/or a busy lifestyle. I'm sure just about every PM here will tell you that we've all had time wasted on no-shows at some point in our career. It can be very frustrating because our time is not anything that we can get back.  Prospects will confirm an appointment and still not show, so just be prepared for that.

If you decide to manage on your own, as others have suggested, you should definitely become well educated in your local landlord-tenant law, Fair Housing Law, etc.  Study it the same way you most likely studied how to acquire your first property, or the 10% you save in PM fees will seem like pennies if and when you are hit with a lawsuit.

Best of luck to you!

Laticia

Ethan Jacobsen · Answer

We use Appfolio and Tenant Turner to manage all our units. They are great and keep everything very organized. I've been an Appfolio user for a long time and always recommend them - let me know if you have in depth questions. Just depends on how many units you need to manage since some software companies charge a minimum, but maybe that's worth it for you.

Dick Rosen · Answer

@Chris Heppner https://www.narpm.org/find/property-managers?submitted=true&toresults=1&resultsperpage=10&a=managers&orderby=&fname=&lname=&company=&chapter=&city=Buford&state=GA&xRadius=52

Chris Heppner · Answer

@Anna Swartz-Lopez thanks for the response!

I’m regards to a lawsuit, they would sue my company rather than me personally so my personal assets would be fine but I understand where you’re coming from.  Do PM companies generally handle any lawsuits if something like this happens?  Also, wouldn’t the agreement state something in regards to the tenant accepting responsibility in case they get hurt or whatever?

Anna Swartz-Lopez · Answer

From the perspective of asset protection, having a property manager is absolutely necessary. If you manage your properties yourself, you are personally liable for anything that happens on those properties. If you use a property manager, it helps build that wall between whatever entity holds your property, and all the rest of your personal assets.

So let's say your tenant slips and falls on the property. If you are managing the property yourself, the tenant can sue you personally and come after all of your assets. Having a property manager helps shield you from the day to day risk of your property.

Chris Heppner · Answer

@Dick Rosen awesome, thanks for the advice!!  Would you happen to know any good PMs in Georgia?  I have some I’ve interviewed but am always interested in referrals.