Switched to a Property Manager

[John Reagan Johnson]

This is a post based off of curiosity. To all self managing landlords that switched to using a property management company, what caused you to make the switch? Was there a situation you encountered that deterred you from self managing? Were you just looking to gain your time back? Did you feel like using a property management company could help you achieve the goals you had for your investment property? 

If you have any stories that led you to switch over to a property management company, I'd love to hear them! 

[Drew Sygit]

@John Reagan Johnson hope you don't mind a PMC answering, but most of our clients hire us because:

1) They live out of state and don't have time & expertise to remote manage

2) They don't have the time to manage

3) They don't feel they have the necessary expertise and/or don't want to risk learning as they go and making an expensive mistake.

Go read Kiosaki's Cash Flow Quadrant book.
To become a true business owner or investor, you need to leverage your time through others.

[Kevin Epp]

I have properties out of state, and I use a PM for that reason.

I am also a property manager in my own state. The owners who switch to a PM come to me for the same reasons Drew said above.

It is not rocket science, most folks hit a point where they no longer want to trade their time for money. 

Lastly, the barrier to being a successful landlord is getting slightly more difficult (still not wildly difficult) year over year due to tenant friendly legislation being passed. I live in Tacoma, WA…a lot of folks don’t want to deal with having to learn the local housing laws.

[Heath Sizick]

I agree with everything Drew & Kevin.

Old head here & echoing what my late-dad always said - "time is money." At the end of the day, owners get a PM to minimize headaches. They are hiring a PM to act as their landlord & to deal with the drama of tenants, the painstaking of marketing, the uncertainty of vetting the right tenant, the headache of a late-paying tenant, & the details of staying compliant with local & state laws. That is my 2 cents! 

[Peter Mckernan]

I would agree with Drew, and I was just on a call with investors yesterday for a mastermind I am in. The guy who runs it lays it out like this..

1-5 rentals you are still doing okay, have more stuff come up between all rentals the closer you get to 5 or at 5. The 5-10 it gets heavier and a lot busier, and 10-15-20 it really is untenable to self-manage especially if this is not you main business like a person buying their own rentals and building it like a small business. 

A manager will roughly cost $100-$150 a month to take over a unit (it could be more or less in your market) and manage the units. So, if you have 10 units and you are going to pay $1,500 a month and you are working on an active income job, too, this is an easy switch due to the labor mentally and physically (even if it is just phone calls) to get these rentals running as a well-oiled machine.  

The time back will free up more time to increase your active income, or acquisition of more rentals to get you more cashflow (passively or actively). A PMC is great to use not only for all these items but also really being a trusted source for vendors too etc. 

[Bryan Stengel]

Hi John, I also rely on a property manager for the the fact that my properties are out of state.  Any issues that occur with the property can easily be solved with the property manager working nearby.  If I lived close by, I would certainly handle such issues on my own.  I have strongly considered managing on my own in the past.  Nobody will take better care of your property than yourself and nobody will be as invested into as yourself.  I would recommend that you do your research and seek out the best property manager in your area.  I have noticed that as companies they grow, their quality and attentiveness tend to decrease.  Communication is highly important to me as well.  I'd like to get weekly updates if we have a vacancy or ongoing issue.  It is definitely worth it to have if you can't be nearby. 

[Travis Biziorek]

Hey John,

I own 12 units in Detroit but currently live in California. I actually used to live in the area and self-managed all my properties while I was there. Even after moving 2.5 years ago, I continued to self-manage because I had a solid network of connections that made it pretty easy to handle remotely.

That said, it eventually came down to wanting my time back. My wife also made it clear that if we were going to expand beyond what we already own, she didn’t want to be involved in managing them. Over the last 3 months, I’ve moved 4 of our 12 units over to a property manager. So far, it’s going really well, and I’m glad we made the shift.

For me, the decision wasn’t about issues with self-managing but more about freeing up time and mental space to focus on the next steps in our investing journey.

Curious to hear others’ experiences as well!

—Travis

[John Williams]

I used a property manager (before I was one) for (1) time & headache savings and (2) the value the property managers provide by economies of scale (marketing, discounts with vendors, etc.). Even the most expensive property managers are EXTREMELY cost effective if you really think about it!