Found our limit on self management while working a W2

[Carl C.]

I feel like I have seen many questions about self-managing properties vs. hiring a management company. Here is a little something we have realized after ten years of REI. When we started out we wanted to maximize our income with the understanding that we would be trading our time in management of our properties for the income we would potentially lose to a manager. Some people think that is crazy. I would still advocate for that approach for newbies. Because of our grunt labor to make things happen, we have a very good understanding of how our properties operate and what it would take for a management company to take things over in the future.

In August we closed on a duplex that brought us to 11 units. Two of those units are college housing with a total of 8 tenants so they operate more like multi families, but actual doors is now 11. All of our properties are within an hour's drive of each other. People say buy everything in one town to make your life easier. Great idea, but we found that we had to go where the deals were. All relatively close, but not that close. The Newest duplex needed a large renovation to make it rentable. We are mid renovation now that has been made difficult with the current market for contractors. This has put a lot of pressure on me personally to do more work that I would have preferred to hire out. This is most certainly my limit. The reno work is almost done, we are close to listing the units for rent, later than we had hoped, with the assumption that we will find good tenants, conservatively, by February. 

Once I'm out of renovation hell, 11 units, self-managed, is going to be my limit. For us to grow, which seems likely, if not inevitable, one of us needs to step out of our W2 job or we need to start hiring management. I hope this helps some newer folks who wonder how much can they handle alone. What we have done has been an incredible learning opportunity and I wouldn't change a thing. Now that we have learned, we have evolved our strategy, and we will be operating differently in the future. Just because you make a plan, don't be afraid to change it when you outgrow that plan or find out that it no longer works! 

[Davartay Miller]

Great points, gentlemen! 

@Carl C. The most important thing here is letting go if you select a property manager. I know it sounds unrealistic but I promise you if you hire a great company that truly knows the market, has systems in place to protect you, has a team of client specialists who will keep you updated, knows the laws, and etc. – You should be in great hands. Now that does not mean do not do your due-diligence throughout the process. All persons should exercise due diligence and consult with legal and tax professionals before making any investment decisions that you are unsure of. I say you start with interviewing others in the area and see what services they provide before getting into pricing. It's going to be natural to think this is high and that is high because remember you did everything yourself. A property manager job is to handle the headaches so that you do not have to. I can not speak for other companies but our team departments are in place so that we can collectively protect your investment: 

Maintenance Department 

Collection Department 

Customer Service Department 

Renewal Department 

Leasing Department 

Renovations Department 

Buying Department 

Sales Department

@Brandon Rush I have a background in architecture, contracting, and project management. My wife and I do own properties but guess what? I have learned to step back sort of. Yes I am similar to you I love it, enjoy every second of it, but there are certain situations that can arise that can spoil it all. I think many of us have had this thought..... I know what I am doing and I don't want to pay someone when I can be sure that it's done, correctly. But at what cost? Missing family time? Not going on vacation when you like? Rushing to resolve an issue because the resident is in your ear? 

Obviously working for a large company managing 7,000+ properties in multi cities – I have seen and heard a lot. There is not much we have not experienced. But even with that said, I was on the fence before saying property management is the best way. 

Again, great points gentleman! I can see where both of you are coming from and hopefully you understand my point of view as well.  @Brandon Rush @Carl C.