Hire A Property Management Company or Manage Rentals Yourself??
Readers like you send in dozens of emails a week to me asking specific questions to help them reach their 
real estate investing goals.
We get to them as soon as we can… and often post the questions and answers on the blog for others to learn from.
Anyhow, a reader named Brett emailed us a question about whether he should manage his own rental properties… or find a property manager to manage them for him . Either way is fine… you just need to make sure whatever you do you keep good tabs on the situation.
Here’s Bretts question and our answer is below. If you own rental properties or are looking at buying rental properties… take a quick read so you get an insight into a couple options you can choose from.
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Brett’s Question:
"… Put the money into three residential rental properties. Decided to manage myself. Refurbed myself. Rented to the first sob story that came along. They destroyed the property. I nearly lost everything. That was ten years ago. Have kept an interest. J ust very gunshy. This brings me to my question:
Am I better off using a management company or trying to overcome my management weaknesses?
Thanks!"
Our Answer:
"Thanks for the question… great question by the way.
Congrats on getting your first two deals out of the way… downhill after that.
Well… in my opinion it really depends on what your goals are… and whether you have room in the cash flow to pay a management company.
If you find a reputable property management company that you’ve thoroughly checked out, got references on, checked to see if they’re registered w/ your state, the BBB, etc… and you feel comfortable w/ them… that may solve your problem (if you can afford their fee).
But, remember… just because you’re hiring a management company doesn’t mean that your problems are solved. I’ve heard many stories from investors who were duped into working w/ terrible property management companies and ended off way worse than they would have been had they managed it themselves.
Just do your research on the property manager BEFORE you ever hire them to do ANYTHING.
For me, I actually manage my units myself… and I live out of town from almost all of them.
What I did was create a list of "outsourcers" that I can trust for each type of service needed.
For instance, I found a reputable:
- plumber
- handyman
- carpet shampooer
- house cleaner
- lawn guy
- heater/AC tech
- etc. and I delegate all duties to them respectively
If you have built up a trust with a tenant that you know will be there for a while, chat with them to see if they could be the onsite "manager" in exchange for a slight rent rebate. Many tenants would be glad to do this… and that ensures that someone onsite has their eye on the property.
Personally, I collect the rent checks myself and shoot the reports to my accountant every month who keeps track of the finances on the properties.
Tenants call my "property" line w/ problems and leave a message… I follow up and send the right "outsourcer" to take care of the problem.
This works for me because I’ve done a good job at finding people I trust to take care of these tasks… the toughest person to find for me was the handyman … but if you look around enough… ask other property owners in the area who they use, etc… you’ll be on your way.
But, like I said… if you find a truly reputable property management company who is highly recommended by many investors… give them a try for a while… don’t sign a long contract… and keep close tabs on how they do over the next 6-12 months. Be sure to get updated pictures of the units every couple of months so you can see first hand what your units are looking like.
In summary, it’s up to you on whether you go with a property manager or manage them yourself. If you choose to manage them yourself, just think of every kind of possible "problem" you could have… and find reputable service providers in the city of the building to take care of that stuff… create a list w/ their contact info for quick reference.
If you go with a property manager… do your thorough due diligence on the company and make sure you talk with actual investors who have used them. A great way to get references is to connect with the local real estate investors association or "Rental Housing Association" and ask other investors who they would recommend.
I hope that helps! Let me know what you end up doing.
Cheers,
- Trevor
Have A Question?
Shoot in your real estate investing questions and we’ll answer them for ya!
Hey, my name is Trevor and I'm the founder of The REI Brain and a real estate investor since the age of 21. Right now, my focus in real estate investing is multi-family income properties and I have plans on moving more into the commercial real estate investment world in 2008 and beyond. 
Trevor,
I am interested in learning more about buying, renting and selling real estate. If you were going to buy one course that detailed the techniques used to identify, negotiate and rent/sell great properties which one would it be??
Thanks
John