Self Managing vs Hiring It Out

[Micah Haworth]

Greetings BP,

My Wife and I are pretty close from getting into our first Quadplex. It looks like our most recent filp has gone well and should enable us to put about 100k down for the next property. This will be our first rental experience managing tenants and we are considering hiring out. We both currently have very active jobs that will cause us to travel on occasion and work a good amount of weekends. Because of this I leaned more towards hiring out, but we will be living in the property for a while and are at the beginning of our RE Journey so pocketing the extra 10% Cashflow would be very helpful. Would love to hear people's thoughts on how they decided between the two and if management has taken over their life too much or a manageable amount. 

Thanks in advance for the feedback! 

[Dave Poeppelmeier]

@Micah Haworth Congrats! Some basic questions to ask yourself is how willing are you to be everything right now: customer service/maintenance/bookkeeping? Will you or your wife answer the phone for resident questions/maintenance requests? How far away from your building do you live and will you be able to get there within 24 hours? Have you read up on how to manage a property? 

Granted, with a 4-plex you're not going to be there 5 days a week or anything, and no you're not going to get calls about a stopped up toilet at 2am. But, sometimes when it rains it pours and a lot of things go wrong at once. I was able to handle everything with a overly full time job until I hit 7 SFH, then I dropped to part time because I simply didn't have enough time to do everything I needed to. But, I also enjoyed learning about how to manage a property (except for the really hard, expensive lessons that I could have learned about if BP existed back then).

If you're willing to get a little dirty, go for it and manage it yourself. The biggest thing is to find a trustworthy Pluming/HVAC/Electrical tradesperson/company. Starting off, until you find some individual people along the way, I would suggest going with established, reputable companies. Yes, you'll pay a little bit more, but you don't want Frank from Craigslist going into your property and screwing things up. Otherwise, get yourself a software/app to run your books and find a CPA/Tax professional that knows RE. If you can get those established, you're off and running. If you try it and it doesn't work, get a PM. 

If not, there's no crime in that, just budget your 10% for maintenance, interview some PMs in your town (see the dozens of articles on here about what questions to ask), and continue on your investment journey. Keep pumping that W2 money in the front door and buy more RE. Good luck!