Do you self manage or use a property manager?

Question

Hi all!My real estate partners and I currently own a few rental properties out of state which we self manage. We are starting to look into investing in Spokane. Given that one of our colleagues is from the area, the question has come up whether we should self manage or hire a property manager. Obviously, there are pros and cons with both. We have had limited experiences with property managers, and we are weighing the benefits of not having to take 3am emergency repair calls vs the cost of having someone else manage your properties. We are frequently told that no one will care about your properties as much as yourself. I'm just curious about everyone's experiences. Do you use a property manager or do you manage your properties yourselves? How did you come to that decision? If you are using a property manager, how did you find yours and how do you ensure that they are doing a good job? Finally, do you have any unforgettable (good or nightmarish) experiences that you had with self management or using a property manager that you are willing to share?Any response and help is greatly appreciated. Thank you,Linying

Thomas S. · Answer

I only buy local and self manage 30+ doors. It's a fairly easy job.If you hire a PM you still need to manage your PM but you do not get calls, you make calls and hope your PM returns them. Hope being a key point.If you use a PM you must let go and not be anal about your properties.

Karl B. · Answer

Hi, Linying. I self-manage from across the country. I own a handful of multi-family properties. I've only ever had one middle-of-the-night call and the tenant was on 'something' (which was later confirmed) - he called to tell me there was a puddle of water underneath the refrigerator. Turns out the plastic water line connecting to the fridge had gone bad. Aside from that, no late calls. I can understand why someone who doesn't have the time nor patience chooses to have a PM (especially if they're high-income earners in something other than real estate and they would rather have a PM do everything so they can focus on their high-paying profession). But for me, that extra 10% a month (which is higher because many PM companies tack on a percentage of work done by a tradesman - often a set percentage of the total bill the tradesman submits; plus when I look over my properties I'm often getting a lower price (electrician, plumber, handyman, etc.) than a PM because I am proactive about it). The area I invest in is notorious for bad PMs. My limited dealing with one was prior to purchasing a 4-unit and the seller's PM failed to show up to let a contractor in for a quote. From time to time, my dad (who lives where I invest) will go to a property to meet with a tradesman, unlock a door or perform a random task (like empty the coin op washer/dryer). He's doing these random tasks maybe once every four weeks. The way I see it, I'm running my properties well and I'm saving 10+% that goes toward buying more properties and/or improving my current properties.

Karl B. · Answer

@Henry Thomas Austin Hello. No. Meaning I will have someone working for me who will help manage my properties for me (as opposed to hiring some 3rd party PM business).

Hank Austin · Answer

@Karl B. in-house meaning lives in one of your units?

Karl B. · Answer

@Linying Zou If I was starting out I wouldn't. But I plan on buying enough multi-family properties there where I'll hire an in-house property manager who will start part-time and it will become full-time when the need is there.

Linying Zou · Answer

@Karl B. Thanks for the reply. Would you do the same if your dad doesn't live where you invest?

Jon Maroni · Answer

My wife and I live in Spokane (ironically given your post) and our properties are in NY state. We use a property manager and have had a very good experience with them. Vetting is key, and you have to talk to local real estate investors about their experience with the management company. Fortunately for our first deal we were living in the area so we were able to do that work more easily. Now that we don't live there we take an annual trip out east to check on our properties, it is worth it every time. If you are looking for property managers in Spokane there are bunches of real estate investors on BP who have probably had experience with them. PM me and I can point you in the right direction. My first job here was as a real estate loan officer so I got to know the market fairly well but I know there are other people who know it better.