Should I Do My Own Property Management
When do you know its time to pick the right Property Manager. I get asked this question a lot. Should I get a property manager or should I do it myself. Well it really depends on a number of things.
First of all, are you a handyman, do you like doing these kind of things. If you got a call in the middle of the night, do you not mind that. So are you capable and do you have the skills or do you have to farm it out to trades people or a combination of both. So it really comes down to what your level of skill is and how much you are willing to farm that activity out.
Second, do you mind being woken up at 1-3 in the morning because the toilette are plugged, the water is not working. We get those calls all the time. Especially with new homes because they are still ironing out the kinks in the construction. They are still under warranty but their are still defects with new homes.We are constantly going out and responding to tenants on issues.
Third, do you have the finances in place to support that. So what that means is have you bought the property with enough margin in there that you can afford a property manager. I know people that buy properties that they do not make any cash flow on it. So for them to actually hire a property manager would actually have a negative cash flow. When I do my analysis on rental properties I make sure I allow for a property manager for maintenance even if I on plan on doing them myself.
Forth, do you have the time? What I mean by that is so lets say you buy one property and that is easy enough. I know a couple of friends they have one or two properties and they manage them their selves. That is manageable. They get a call they go out, they fix the sink or whatever they are handy to or they get a trades person. It is very easy to manage 1 or 2. As you get up there 3, 5, 10, 20 at some point you are going to say this is just too much work.
Now you may think that its going to take away from the cash flow, But as you get more properties, the properties are increasing in value and rents are increasing and now you have more margins and can afford to pay for a property manager.
So those are guidelines I use when recommending people whether they do the property management themselves or whether they outsource. It really comes down to what you want to do. How much time you have to do it and what kind of skills you have.