Investor · Chelsea, MI · Member since 2013 · 350 posts · 138 votes
I've been meeting with some different property managers recently to (a) get an idea of what areas they see as good investments and (b) figure out who I would want to use to manage my acquisitions.
I was very surprised to hear from one that he doesn't have any rental properties of his own. Should this be a red flag? On the one hand, I would want someone who has experience knowing how to increase NOI on a property and see potential (maybe just working with other investors would give this ability?). On the other hand, if someone is having success with investing, why would they be splitting their time to manage other people's properties and, worse, would I have to worry they would try to steal deals that I asked them to look at before purchase?
Investor · Los Angeles, CA · Member since 2013 · 231 posts · 260 votes
13y
@Brett Russell I'd say in my limited experience it is more beneficial. I have a property manager who has several of his own small buildings. He has the property management knowledge from an owner's point of view and does the tenant screening to a higher level in my opinion than someone who never owned income property (generalization, but I think true for the most part all around). My two properties are his only other properties, so it is more natural for him to keep the same standards rather than someone who manages a bunch of rentals for others.
I tend to like the smaller managers who don't operate a ton of buildings, especially for smaller buildings (would be different if you are talking a 50+ unit apartment building). In either case, I think it is important to asset manage your properties or manage the manager. Be involved and ask tough questions and strategize with your manager.
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
13y
I don't think if they are an investor or not necessarily matters, but it could help or go either way. The biggest thing a manager needs to understand, and I mean really understand, is the importance of quality when it comes to screening tenants and so they know that turnovers and repairs and such will kill an investment. If they don't understand those things, as I've seen with some managers, they will kill your profits and not even understand why. My favorite manager, well I don't know if he has his own properties or not? I know he used to be a real estate agent for primary buyers and he was a developer at one point, and he sells a ton of investment properties now, but not sure what he personally owns. It would be fine with me if someone didn't own any because maybe they didn't qualify to buy or some other totally legit reason (maybe never cared to have one), but they need to understand what makes a good investment and how to manage it. I have a lot of BiggerPockets blogs about property management if you haven't seen them. I'm extremely snobby about my management and expect a good bit from them (although in reality "a good bit" doesn't actually mean that much, just common sense). I've had too many ridiculous ones.