Property Managers - are they worth it?

[Ryan Hurst]

I've recently began looking at multifamily properties (1-4 units) in Long Beach, California and was curious to understand your opinions of property managers. My partner and I work in the finance industry and regularly work 50-60+ hours weeks. While we don't necessarily have the time to manage the properties 100% ourselves, we at least do have the flexibility to be moderately involved and plan to keep the property manager accountable and regularly undergo thorough audits of incurred expenses (i.e. request bigger ticket items $150-$200< to be submitted etc).

Through a mentor (very large SoCal real estate investor involved in large Industrial, retail, and with vast experience in SFH-MF), I've been seriously advised against hiring a property manager - he's warned that while the baseline fees appear to be a good deal, the inflated repair bills, stalled evictions, and mismanagement will eat up cash flow and money out of pocket will be needed to make mortgage payments - even with the best PMs.

Out of curiosity, what has your experience been like with property managers? Assuming having more properties under management may potentially affect the bottom line as well?