Property management vs software vs doing it all myself.

[Jim Kelly]

I'm very new to the RE game at 31 years old I'm trying to start my big journey. 

Well I'm closing on my first property in 12 days and I'm trying to decide how I should structure the property management.

My main concerns are legal lease agreements, screening, credit checks filling it when empty, vacancy, online payments would be nice. etc...

I can handle maintenance and the hopefully very few evictions/non payment issues/other issues for now. 

I talked to 2 other investors in my area and both of them use a property management company but both have 15 plus properties..... I'm sure when I get to that point it would be worth it as well. 

I seen a place called marble which handles everything for $50 has anyone used this? It seems cheap? Compared to doorloop etc. 

[Nathan Gesner]

Quote from @Jim Kelly:

You can learn a lot through self-management. You can also lose a lot. 

I manage for hundreds of Landlords. Most of them started out managing on their own. Most of them lost tons of money, some to the tune of $100,000 or more. I have one poor lady that lost well over $100,000 in five years through unpaid rents and damages, plus she was going mentally insane over the stress. I took over her properties, kicked out all the tenants, cleaned the properties up, and now she's making money hand-over-fist without spending a single minute having to worry about anything.

A good property manager will prevent you from losing money by keeping you at market rates, reducing vacancies, dealing with problem tenants quickly and effectively, etc. The increased income often pays for their services.

Remember: cheaper doesn't mean you'll make more money.

Start by going to www.narpm.org to search their directory of managers. These are professionals with additional training and a stricter code of ethics. It's no guarantee but it's a good place to start. You can also search Google and read reviews. Regardless of how you find them, try to interview at least three managers.

1. Ask how many units they manage and how much experience they have. If it's a larger organization, feel free to inquire about their staff qualifications.

2. Review their management agreement. Make sure it explicitly explains the process for termination if you are unhappy with their services, but especially if they violate the terms of your agreement.

3. Understand the fees involved and calculate the total cost for an entire year of management so you can compare the different managers. It may sound nice to pay a 6% management fee but the extra fees can add up to be more than the other company that charges 10% with no additional fees. Fees should be clearly stated in writing, easy to understand, and justifiable. Common fees will include a set-up fee, leasing fee for each turnover or a lease renewal fee, marking up maintenance, retaining late fees, and more. If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee. Don't be afraid to negotiate, particularly if you have a lot of rentals.

4. Review their lease agreement and addenda. Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.

5. Don't just read the lease! Ask the manager to explain their process for dealing with maintenance, late rent, evictions, turnover, etc. If they are professional, they can explain this quickly and easily. If they are VERY professional, they will have their processes in writing as verification that policies are enforced equally and fairly by their entire staff.

6. Ask to speak with some of their current owners and current/former tenants. You can also check their reviews online at Google, Facebook, or Yelp. Just remember: most negative reviews are written by problematic tenants. The fact that a tenant is complaining online might be an indication the property manager dealt with them properly so be sure to ask the manager for their side of the story.

7. Look at their marketing strategy. Are they doing everything they can to expose properties to the widest possible market? Are their listings detailed with good quality photos? Can they prove how long it takes to rent a vacant property?

This isn't inclusive but should give you a good start. If you have specific questions about property management, I'll be happy to help!