All Forum Posts by: Brian Hughes

@Justin Brickman - I'm sorry to hear your clients had a bad experience with a Property Manager - but just because one realtor may suck, doesn't mean you shouldn't use one!  

@Randall Alan Let's address your points:

So you get 8 calls a month - and when you do, it takes 2 minutes to handle?  Do you check up on the repair, coordinate with your tenant, keep the tenant informed of next steps, etc?  Also, for me, I'd rather not have the hassle of a tenant calling me asking when the plumber will be there because we said 1pm and it's 1:15pm.  

Filling a unit - Our PM Company charges 50% leasing fee, so not one month.  

You mentioned calling around to get the best rates but also said you only spend 2 mins on each work order - my question would be, do you call several vendors?  

In either case, a good PM builds strong relationships with the best vendors and negotiates standard rates for common repairs (HVAC service, clogged drains, painting, etc).  So, a good PM will save you on repairs and get them done quicker - the vendors we use know that if they don't keep up, a huge chunk of their revenue is lost

I'm not saying determining rental price is impossible but I would say that I've seen MANY self managers who are way off and they don't know it.  Also the RentoMeter/RentRange, all of them are probably 80% to 90% accurate - so for an average landlord with let's say 30 units, I'd be willing to bet at least a few of them are $50-$100 under market (sometimes more) - meaning they could be getting an extra $1,800 to $5,000 a year.  Also, your average landlord doesn't consistently raise rent - we raise rent 3% minimum each year (written into the lease) but have the option to go higher if the market changes.  

I understand your cost benefit analysis and this, as you said, being your full time gig - I can see why you choose to self manage.

TAHT SAID - what if you took the 3-4 hours a week you spend on Property Management and focused it on buying another unit or other investment opportunities?  That's the opportunity cost I don't think is being considered.

Thanks for your response - I really had to dig in to write this reply! lol 

Cheers,

Brian

@Justin Brickman A bad PM can increase liability - but a good one shields their owners by:  Avoiding any fair housing issues during the leasing process (happens more often to good meaning people than you'd think), ensuring only licensed/vetted contractors enter the property, checking work done by vendors and ensuring safety, inspecting units, the list goes on...

Yes, out of state investors can pull rates, but you know that two blocks over in converse or on the westside could mean your comps aren't comps.  Meaning (as it is in many areas) - it does take local expertise to get the rental price right - I've seen many self managers taking way under market or charging way over and wondering why their home has been on the market for months.  You can get sales prices online easier than ever too but I'm sure you would caution your clients about trusting those implicitly.

It sounds like you have worked with bad PM's in the past!  That definitely sucks but not all PM's suck!  Hopefully you'll find the right one who can be an asset to your clients and pays a referral bonus!  Message me if you'd like a rec. 

RentWerx Property Management - $100 / Unit if you have 4+ and have worked with them personally.  They work with out of state investors, have great accounting, and get units rented quickly.

Hi Chris - where outside of San Antonio?  Certain areas this would be great, others not so much.  Also, $470K does seem high in this market.  

I've been in the Property Management industry for around 10 years and it always baffles me when landlords choose to manage their own units. I'm curious to hear reasons why you WOULD want to manage your own units.  Below are my top 5 reasons to hire a Property Manager:

1. Reduced liability - do you want to be sued for a simple mistake, I don't

2. Accurate Rental Rates - Unless you are very closely watching changes in the rental market, it is going to be difficult for you to determine accurate rental rates.  If you are out of state - forget about it - rates change quickly and there are many reasons why one home would be worth 10% more or less. 

3. Free time - Who wants to get a call from a tenant while on vacation or during the holidays?  I'd pay at least $100 a month to just know that I'm not going to receive a call about a toilet, faucet, or anything like that.

4. Accounting and Reporting - Sure you can hire an accountant or invest in/learn specific software that will help, but for my money, I'd rather rely on a professional who gathers this info and provides the docs I can hand over to my CPA instead of spending hundreds/thousands of dollars having a CPA figure it out or stumbling through it on my own.

5. Increased ROI - this is the biggest one - ultimately getting more rent, avoiding mistakes/lawsuits, and the cost of what I value my time at - there is NO REASON I would ever manage my own properties.

What do you think?