What Does A Property Manager Do? Do I Really Need One?
You know Kris it seems to me like this whole property management business stuff is kind of an unnecessary expense in real estate you could really take home a lot more money if you didn’t need one of those. Well true. In fact, you might actually have a point there. Today on limitless TV, I’m going to be talking about property management and is it something that you really need? I love property managers. In the beginning, I didn’t have one. I was the property manager. And you know what ?When I bought my first real estate deal, I was thrilled about being my own property manager because I really didn’t want to take 10% of the gross rent and actually give it to somebody else. I was making $1,500 a month on my home and ten percent of that is a hundred and fifty dollars. And when I didn’t have a lot of money a hundred and fifty dollars was enough that said I’m gonna be the landlord. Now by the way, what does a property manager actually do? Well they put tenants in homes, they collect the rent, they do the background checks and make sure you got the right kind of people. You have to sometimes deal with evictions or getting people out or having hard conversations and then if there’s repairs and maintenance then you’re basically watching over those things and ensuring that they’re taking place. Property management is a vital function in all real estate. And in the beginning for my first 25 homes I was the property manager. On my first 10 homes I loved it. On my next 10 homes I started liking it less. And on the last five homes of the 25 that I ever personally property managed I started very strongly disliking management. Because that was a lot of phone calls and it was a lot of headache and it was a lot of work and then there was a lot of accounting and I was doing it all by myself while I was a full-time student going to school full-time. And it just felt like it was starting to take 20 hours a week and I called a buddy of mine in Florida and I said I want to give you an opportunity. I want to pay you $3,000 a month to manage all of my properties so that I can get busy on building a bigger portfolio and bringing more properties in. He moved his family from from Florida and I taught him how to do what I was doing. I taught him how to place tenants, I taught him how to do open houses, I taught him how to select and do background checks on the right tenants that had better-ish credit that had greater incoming and more stability and good jobs that weren’t going to bring smoker pets if possible into the homes. And he did a brilliant job managing that I also had a property manager accountant whose job was just to receive the money, put it in QuickBooks log it all appropriately so that I could do my taxes appropriately at the end of the year. And the moment I hired my friend to come in town and do that it was like this massive burden got released and it was when I discovered the efficacy of my new belief, if you want something done right don’t do it yourself. Property managers are vital. It might be you in the beginning but if you want to grow and perpetuate then ultimately you need to get to a place where you’re no longer doing the property management. What they do is super valuable I’ll tell you that a hundred and fifty dollars a month on a fifteen hundred dollar gross rent some months their jobs are easy right? The tenants paying on time, they don’t have to call, they’re receiving, they’re cutting the rest of the money to me, there’s no maintenance. And it’s like why am I paying you that money but the moment the evictions kick in or the moment the hard conversations or late payments, the moment they have to issue and file paperwork, the moment they have to put a tenant in the house, I become deeply grateful for that money that I pay. Property managers essentially are going to do the maintenance, put people in the homes, do the background checks, collect the money, and do the nasty hard things when it comes to evictions, paperwork’s, hard conversations, collecting on late, collecting late fees etc etc etc. Recently one of my property managers even went to court because there was a tenant and by the way that will happen if you’re on a lot of homes. First time I actually had someone take me to a small claims court over an issue of saying we put money in the house and we’re leaving but we think we should get some of that out and blah blah blah. My property manager, they handled that for me creates a stress-free world for me. But what I really want to share with you is how you game the system to your favor. Do you want to know how to take property management, have other people do the work, and get the most out of it? check this out. Let’s talk about how you game the system. It comes down to the property manager right? To you paying if you’re collecting a thousand dollars of gross rent and paying them a hundred dollars so that 10% that may feel like a lot of money to you but a hundred dollars doesn’t buy a lot of loyalty. A property manager with several homes however, you actually end up purchasing a lot of loyalty. That’s the game that I play is that I’ll have all of my clients buy real estate in one area so we give all of our properties and there were the kingpin. We have four hundred properties place with them which means that you now matter and it means that instead of 10% they’re often charging 8% or 7%. A discounted rate and they know they gotta run the operation squeaky clean and keep you happy because they’re tied to something way bigger. Volume is how you win in real estate when it comes to repairs and bids and winning and buying and absolutely in property management, the game is all about volume. So even if you were to buy three homes in an area with the same property manager, those three homes purchase far more loyalty than if you just have one home. So when you’re thinking of your system of where to do deals, think of the power of volume and leverage that to your benefit. And that’s what a property manager does. Thank you so much for watching the video today I really appreciate you. If you haven’t already, hit that subscribe button. Take the opportunity to learn more and see more of the videos that we got going on and drop some comments below on questions that you have or videos that you’d like to see us create