CONCERNED ABOUT PROPERTY MGT. - Posted by P.S.Ness

Real Estate Investing
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Posted by Dave T on November 10, 1998 at 20:45:42:

I use professional property managers for all my rentals. I pay between 7 and 10 percent of gross rents collected. Property management is always an expense item I include when I do a cash flow analysis for any rental property I may consider purchasing.

For me, professional property managers remove the headache of dealing with tenants and toilets. I do not have to be on call day in and day out. The property manager does the preliminary tenant screening, reference, income, and credit checks. I approve a tenant’s application when all the preliminary checks suggest a likely candidate tenant.

Having professional property managers also allow me to invest in many areas of the country without worrying about being an absentee landlord. I currently have holdings in MD, OH, and SC. My time is free to investigate and acquire additional property only because I delegate the property management to licensed professionals.

The professional property manager knows the applicable state landlord/tenant law and keeps me from running afoul of the law as well. For example, I did not know that in MD, the law requires me to pay interest on my tenant’s security deposit held in escrow, but my property managers did.

In my opinion, the small management fee is well worth the cost.

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CONCERNED ABOUT PROPERTY MGT. - Posted by P.S.Ness

Posted by P.S.Ness on November 10, 1998 at 20:12:41:

After looking at about 6 properties, I think I’ve found the right one to buy as my first investment. The numbers work, I have a very motivated seller and financing is no problem (with virtually no money down - yes it’s possible). The only item that causes me to hesitate is the idea of managing the property myself. I don’t know how much time will be required and how much of a headache it will be. I know this is all partly a function of the quality of tenants I get. I am a licensed broker and MAI commercial appraiser with ample knowledge from the valuation and number crunching side, but have no experience managing property. Any words of advice or encouragement?

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Re: CONCERNED ABOUT PROPERTY MGT. - Posted by Rob FL

Posted by Rob FL on November 12, 1998 at 17:07:37:

The best book I have ever read on property management is: How to Buy & Manage Rental Properties, by Irene and Mike Milin. It contains straightforward methods on hands off management.

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Re: CONCERNED ABOUT PROPERTY MGT. - Posted by LAURE

Posted by LAURE on November 12, 1998 at 08:31:16:

I have managed up to 23 of my own units at one time. I have also had a property manager work for me on headache properties, or when I was too busy to deal with them properly. I would NOT use a commercial manager again, except to rent…possibly… With the manager I used, I got below market rents, less than what I got when I turned over the properties. The Tenants left in a year. They did, however, put me in touch with some good handymen.

I have taken a new approach to management. FIX IT, FIX IT, FIX IT. While the property is empty, replace the toilet, replace the vanity, replace the faucets. If the floor is soft … rip it and fix it. If the front door is ugly, buy another (good deals on damaged doors at almost all building wholesale stores… usually just a scratch) THEN RAISE THE RENT ! Cheap rents bring people who are late in paying their rent. Poorly maintained property, brings calls.

CALL: The toilet is overflowing.

ANSWER: Call Roto Rooter to come out. You make the appointment and meet them… It would be easier for you (the Tenant) to schedule the meeting as to what is convenient with your work schedule, to be at the home when they can come. Have them call me to confirm that I will pay the bill and ok the repair.

Call: The furnace won’t run.

Answer: SAME ANSWER… Tenant call my pre-approved Repairman. Have a call with estimate of repairs before work is done.

What else is there? You just get companies you can trust, and have the Tenant do the leg work. Then there is no more excuses, and you are out of the hot seat. You also don’t take your valuable time from your day/ or night running all over the place.

IS It more expensive? Well, I am not going to ruin my nails snaking out a drain when I can pay Roto Rooter $55.00 and never leave my office. Also, the prompt repair is off your shoulders and onto a technician’s AND the Tenant ! The next call I get is with the estimate ! JUST FIX IT !

EXCEPTION: I have a high end rental… Toilet Tank cracked, water all over house floor when they awoke. I called plumber and they wanted $800.00 !! Could not find any of my handymen…I said yes, because my husband was in the emergency room at the hospital… A half an hour later, I called and cancelled the work order. I bought the toilet for 50.00 and put it in that afternoon while they were taking x rays of my honey’s tummy. Total installation time … 45 minutes. I’ve never done this before, buy my husband was quite proud ! (It was a kidney stone.)

Laure :slight_smile:

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Re: CONCERNED ABOUT PROPERTY MGT. - Posted by AL

Posted by AL on November 11, 1998 at 17:37:44:

Another, great property management course along with jeffery taylor`s is CRUISE CONTROL PROPERTY MANAGEMENT by DON BECK. you can find his course on www.wealthnetwork.com he has the best lease in the bus.I strongly recomend you start off doing the property managment first to know how it works.

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Great info. on property management - Posted by HR

Posted by HR on November 11, 1998 at 07:10:40:

I have been EXTREMELY pleased with Jeffrey Taylor’s Mr. Landlord materials. Jeff is incredibly street-smart, upbeat, and practical. His program teaches you how to maximize “cash-flow, control, and coperation.” He has been called the #1 landlord in America; that has got to be true. The guy’s knowledge and experience is tremendous.

My experience in landlording is limited to one double. I, too, had initial concerns about how many friday’s I would be fixing toilets, about contractors who would take advantage of my building ignorance, about tenants who might sacrifice the neighbor’s pet and worship Thor – you get the picture.

My experience was just the opposite. In fact, one day I calculated how much I was reimbursed every time I stepped into the rental, and it was like $1000/hr. Better than my day pay.

I bought his two year subscription to Mr. Landlord newsletter with the free issues, tapes, rental agreements, etc. It has given me literally dozens of ideas on how to landlord much, much more effectively and efficiently. I have NO regrets buying it. I think it would help you make a very informed decision about this landlording/management decision. His stuff is for sale here, and you can also review his materials at www.mrlandlord.com.

Much success to you!
HR

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Be carefull… - Posted by Jason-DTX

Posted by Jason-DTX on November 10, 1998 at 21:52:04:

…if you do use a property manager. Make sure you get a good one. Just like anything else there are good ones and bad ones. Try to find one from referals, DO NOT just pick one from the phonebook. Are you a member of your local apartment association? It might be worth joining, even for new or small time landlords.
Property management is something you either love or hate, if you are hesitant about it then you should find a good manager.
Good Luck.
Jason

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No money down? Are you sure you’re a Realtor? - Posted by hk CA

Posted by hk CA on November 10, 1998 at 21:04:42:

We couldn’t even begin to tell you the problems without knowing:

How many units?
What’s the area like?
Are rents on a par with the rest of the neighborhood?
Is there a positive cash flow?
How much?
How far do you live from the property?
Do you have the patience to deal with tenants that may be less than honest with you?
Will you have an on site manager?
Do you buy asprin in bottles of 300?
Can you afford to do major repairs such as roof replacement or electrical upgrades?
How much free time do you have on your hands?
Do you have a license to carry firearms?
What’s the condition of the property?
Do you have a death wish?
What’s the average length of tenancy?
What do you weigh?

These questions are absolutely relevent in order for us to be able to accurately assess the situation.