All Forum Posts by: Daniel Lindenbaum

You stated that as an investor, "no one cares more about the property than you." And that's where a good property manager will agree with you. You can save money and be able to check off certain items related to management with software, but how accurate are they? You mentioned tenant screening through the software, but does the software also run detailed rent reports to determine you're marketing at the correct rate? By charging below on rent, you're losing profit, and by overcharging, your properties may end up sitting vacant, which ultimately will cost quite a bit.

Once you have all of these processes being handled by a PM, you can finally afford the one item all investors seek when managing a property that you simply cannot put a price on: peace of mind.

I agree with @nathan on this too; there are good and bad PMs out there (just like tenants). Think of it this way: if we were to screen tenants on criminal background, credit, eviction history, landlord references, and income (3X that of rent and employee verified), even with 25 tenant applications, it's difficult to find a reliable tenant to match all those criteria. The same goes with a property management company. Most are going to screen for: lowest priced, top listed on Google (many top listed PMs in your local area pay to be sponsored, so their actual listing is much lower), volume or size of business, and those who are willing to break their own processes to simply tell you what you want to hear (e.g., I'll list your property $300 above the AVG even though the CMA shows that's overpriced and I won't tell you that it's going to sit vacant).

Things to look for in a property manager if you consider:

1. Google search ranking is important, but read the reviews. It's shoddy if you have a small PM company with only 20 reviews and a 4.9 rating (likely means employees are slipping in 5-stars). Read the negative reviews too; did the PM respond to them to provide transparency? What do the positive reviews say about the experience?

2. Set up a Discovery call with a PM. Your investments are worth your time, and a quick call to find out whether or not the PM aligns with your long-term goals is worth it.

3. Don't be hasty to sign on with someone eager to tell you 'yes' to just about everything. This applies in most areas of life, but if someone is simply agreeing with you, dropping PM fees down a percentage or offering discounts up front and sounds a bit desperate, they could be experiencing high turnover and poor customer retention. The real professionals will lay everything out up front, likely letting you read a copy of their agreement to understand additional services and benefits in detail, and aren't going to be pushy about getting you to sign anything if they feel it's a bad fit or something doesn't align.

At the end of the day, a good PM will have your best interests in mind. After all, some of the best of the trade are also investors too.

Many do get a better idea of the benefits but also the challenges of self-managing by diving in. If you, as an investor, understand the side of compliance, communication, and maintenance, you can also appreciate why people pay to have property managed. It's certainly not easy, even when using all-in-one software like Appfolio. You mentioned timing being one you may have less of in the future, and that's a big reason investors will turn their property over to a professional PM. What are some other things you'd turn over to a PM if you could?

I read this quite often: 'should I self-manage my property or hire a professional property manager?'

It's understandable why many investors and/or accidental landlords would opt to simply self-manage. Among other concerns, many simply feel the fees of property management are too high.

In my experience, most who were willing to take the extra step toward having their property professionally managed were relieved to not have to deal with:

A. Late-night unexpected phone calls from tenants

B. Random calls, voicemails, and invoices from maintenance vendors

C. Evictions (we all dread this one)

D. Compliance issues regarding local landlord regulations

E. HOA violations or fees racked up by tenants

F. Tenant screening (how many prerequisites were really screened before they signed the lease)

G. Vacancy expenses when attempting to market your property above the average rent rate

Alright. You get it. Self-managing can be more expensive than simply working with all of the above. Professional property managers are often licensed real estate brokers who specialize in acting as the filter for you for the number items, which are not only costly but a headache.

Paying a bit more for a property manager isn't so bad when you consider something as priceless as peace of mind.

What has your experience been like, self-managing or with a property manager?