Property management not easy to do competently?

Question

With all the complaints about property managers and mgmt companies, you'd think it were a job that can't be easily done competently.

As a landlord myself, I know what it takes to manage my own properties, and barely spend any time on it.

I was thinking about branching out and managing other properties.

Does anyone have any idea how many properties one person could manage before it gets overwhelming?

Nathan Gesner · Answer

First off, how many properties are you managing that makes you think it's so easy? I know plenty of Landlords that thought it was the easiest thing in the world . . . until disaster struck. Turns out they were just lucky. Once they were confronted with a difficult situation, then they learned how little they knew. I'm not saying that's you, I'm just saying.

One person can typically manage about 100 rentals on their own, but there are factors that could affect this. Single-family homes tend to take less work. Multi-family has lower-quality tenants, higher turnover, more problems. My worst property is a C-class, 16-unit apartment complex that earns the equivalent management fee of 10 single-family homes but it takes the work of 50 single-family homes.

So 100 is not a magic number but most property managers would say that's about the limit. I work harder than the average bear and was up to 150 before hiring my first assistance, but I waited too long.

Jim K. · Answer

@Mike Franco

As a self-managing low C-class landlord, I came to some quiet realizations about property management around six years in. I had some deep advantages coming into this business, most notably quite a number of years of classroom and individual teaching, as well as a good deal of teacher-training and individual mentoring of other teachers in my field. I was raised poor, in similar housing and circumstances to those I rent to. My academic background also led me to read about five books on the subject by the time I took on my second property. Physically, I am in my mid-forties, stand at 6'2", and weigh about 350 lbs. I'm a big, imposing guy, even if most of it is flab. I am of Greek extraction and speak in a decidedly non-local accent, while my wife is a Russian immigrant and speaks with a foreign accent. And finally, I do a lot of my own handyman work on my own properties and I live locally in decidedly non-luxury circumstances.I believe all these things have very obviously contributed to our current success. At the same time, I am not interested in managing other properties than my own. @Nathan G. gave you an obvious example out of his own portfolio of a high-maintenance building, but you can get a lot of surprises in single-family, in duplexes, in nice neighborhoods, with all kinds of tenants from all kinds of social backgrounds, despite the best vetting you can put in place. You can end up in situations most folks who try property management are simply not equipped to handle. I'm not saying I'm special, I'm saying that I was REALLY lucky that I was a good fit for this kind of work in temperament, training, lifestyle, and, dare I say it, even my Greek Orthodox Christian upbringing. This is not a forgiving business when things go really wrong. I'm certainly not ready to handle 25 units and up in my business model, which, admittedly, also includes personally fixing or supervising the fixing of a great deal of what can go wrong with these properties.I would still advocate my own basic approach to this business to people who are thinking of getting into it through low-C-class investing in single-family and small multifamily like duplexes-quadplexes. Place your own tenants. Answer your own calls. Get your hands dirty. Accept that you're inevitably going to be dealing in human misery. Learn the business from the bottom up, build a foundation of solid experience, and it's a lot harder to lose your footing on treacherous ground.I'm really, really not sure my way is for everyone. Now, could I start a property management business in my area with what I know now from managing my own portfolio? The only thing I can say with confidence is that I could probably get people who would fund that start-up from the outside looking in, but with the benefit of my experience, I am dead certain there is no guarantee I would be successful at it.

Mike Franco · Answer

Thanks for the insight guys. The numbers sound good.

Since you can pick and choose your clients, if I were paid the fee of 10 homes for the work of 50 homes, I would just decline that contract.

Drew Sygit · Answer

Agree with @Nathan G.Also depends on the property classes you manage and your organizational skills.

Class A are the easiest to manage and probably what you own.

Class B is harder to manage, but still not too tough.

Class C is where the good, bad and ugly are separated! Most landlords get eaten alive with these.

Oh, before you tell us that you'll avoid managing Class C properties, what are you going to do if an owner wants to manage their 5 Class A, 2 CLass B and 4 Class C properties in an "all or nothing" deal?

Jasmine Delves · Answer

It's heavily dependent on how much time you're able to invest and what tools you use to help.

There are so many good property-management apps for landlords that will help you do everything from screening tenants to collecting rent and helping with accounting. They can do the job of general accounting software (think QuickBooks and Xero) but with more real estate-specific features. This means that even with more than one property, keeping track of records/expenses/documents is more than manageable. Most apps will scale with your portfolio too, so will work for you whether you have one or fifty properties.

If you're just relying on spreadsheets, things can get a little more complicated!

Property management not easy to do competently?

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