All Forum Posts by: Lee G.

great stuff , thanks for posting.  i think I mostly agree with the points made.  It would be impossible to manage a large portfolio without much heartache.  

And It does come down to how you value your time and how much time it takes per year for your type of investment. (Assuming you use your time wisely and it's not couch time with $0 value as your opportunity cost)  I have been lucky so far to have less turnover so that's where I'm coming from. However I Realize if I  were to scale, I can't rely on that luck to continue.

Thanks for sharing your ideas

I entered property management into my spreadsheet on a property I purchased earlier this year and it reduced my ROI by 3%. If you compound 3% higher return on all investments over a 30 year period, we are talking a lot of money.

I think the counter I'm hearing from you is that because of the time factor, instead of having 10 investments making 14%, you could have 15 properties making 11%.

By doing your own property management, you are only improving the return on properties you own, at the sacrifice of additional properties.

I think I follow your logic. There could be something to be said for have 10 properties instead of 15 from a lifestyle standpoint. (Remember I'm using these small numbers for argument sake, it's the relative point I'm trying to make.)

Great responses.  One response to some of you is that I think it's a myth that real estate is passive.   People talk bout it like you just can to push a button and go sit on a beach while the money comes in. I don't buy that. I think that is typical millennial fantasy and you see people like that all the time who tell you about their latest get-rich schemes. 

I would agree that if you are guying large complexes or have 30-50 units, there is no question, some assistance is necessary.  But how many people on this site are in that category?   That is why I think using a blanket statement that you should factor in Property Management is too general.  

You can have real estate be your side hustle and still turn out very well in the end by having solid processes for 10-20 properties that you accumulate over your investing career.  I guess if your the personality type that can't handle people, then hire a property management. But couldn't you argue that being good with people is key to a successful real estate business so I would think the tenant management part would be handled as almost an afterthought. 

Further, couldn't you argue that having good processes is the key to a successful real estate business.  Getting good at the tenant level is great practice at getting good with people and processes. 

I should have mentioned that my investment strategy was SFRs. 

Is factoring in property management into your investment spreadsheet overrated?

Cons of property management: I always care about my property more than property manager, lower ROI, and the probability you lose touch with what is going on in your properties.

I believe part of building the team is to have a great ppl you can call who will take care of tenant issues. Why have a middle man who you pay 10% of rents?? Further you have the risk of them screwing you.

 I've been a landlord for over 7 years and find it easy.  I am not handy, but I know how to pick up the phone and call someone to handle it. From a cost-benefit perspective, I don't think it makes sense. its really not difficult to handle tenant calls!   With technology advances even in the last 10 years, being a landlord (if  you utilize basic modern technology ) is even easier.  

Am I completely off?  With 10% of rents I'm saving, it gives me a margin for error to not have to penny pinch my plumbers and handymen.  

I have been quoted around $9,500 with a reputable company.  I also know of "a guy" who will do it for around $5,000 - $6,000 and tells me it's easy.   Can you elaborate on the hassle you have experienced? @Linda S.

I own 2 properties and am actively looking to add my third. As I further my knowledge of real estate I am finding that HVAC replacement is a game changing expense. I would love to hear how much people are paying for HVAC replacement. I am buying SFR that range from 1500-1800 sq feet which most of them need a HVAC replacement including duct work. Any input on this topic would be greatly appreciated!!

For a 1800 sq foot property they recommended a 3.5 ton 14 seer unit.  They never mentioned 1 ton as an option and provided the 3.5 ton based on square footage measurements of the property.  Are there any pros and cons to getting a 1 ton unit version a 2.5/3.5 range?

@Jassem A. , have you or anyone else replaced the duct work? I was quoted $2,720 on that service.