Why I Fired Property Management—And Began to Manage My Own Investments | BiggerPockets Daily

TL;DR

Author chose self-management over unreliable property managers.

Transcript

this is a weekend edition of bigger pockets daily i'm your host tyler this is the show where we read you a real estate article every day 365 days a year because you can't read the bigger pockets blog when you're brushing your teeth or doing the books why i fired property management and began to manage my own investments by mark ainley when my partn... Read More

Key Insights

• The author initially planned to hire a property management company due to unfamiliarity with the new investment location, aiming to focus on existing operations without the hassle of management.
• Property management companies offer a range of services including tenant placement, emergency and repair handling, inspections, rent collection, and eviction processes, all for a monthly fee.
• Despite the promising services, the author found property management companies lacking in care and attention to detail, often requiring the author to manage the managers.
• The author realized that no management company could match the personal interest and insight they had in their own properties, prompting a shift to self-management.
• Self-managing allowed the author to grow quickly and achieve specific goals, as they had a vested interest and deep understanding of their properties and tenants.
• The author advises property owners to ensure management companies have a vested interest and to be ready to fire them if they fail to meet expectations.
• The importance of setting boundaries, regular communication, and double-checking management company performance is emphasized to protect investment interests.
• The author concludes that an average investment with a great property manager is better than a great investment with a poor property manager.

Questions & Answers

Q: Why did the author initially plan to hire a property management company?

The author initially planned to hire a property management company because the new investment property was located in an unfamiliar area, away from their existing operations. They wanted to focus on their existing management activities without dealing with the everyday hassles of managing the new property themselves.

Q: What services do property management companies typically offer?

Property management companies typically offer a range of services including finding and placing tenants, handling emergency and repair calls, coordinating repairs, carrying out regular inspections, taking action against tenants for non-compliance, handling eviction processes if necessary, and collecting and depositing monthly rents. These services are provided for a monthly fee.

Q: What issues did the author encounter with property management companies?

The author encountered issues with property management companies that included a lack of care and attention to detail. Despite the companies' initial enthusiasm, the author found themselves having to manage the managers and oversee every detail. The companies did not have the same vested interest or insight into the properties as the author did.

Q: Why did the author decide to manage their investments themselves?

The author decided to manage their investments themselves because they realized that no property management company could match their personal interest and understanding of the properties. Self-management allowed them to grow quickly and achieve specific goals, as they had a vested interest and deep knowledge of their properties and tenants.

Q: What advice does the author give regarding property management companies?

The author advises property owners to ensure that management companies have a vested interest in their properties and to be prepared to fire them if they do not meet expectations or cost money. It is crucial to set boundaries, maintain regular communication, and double-check the performance of management companies to protect investment interests.

Q: What is the author's conclusion about property management?

The author concludes that an average investment with a great property manager is better than a great investment with a poor property manager. They emphasize the importance of having a property manager who is committed to the owner's goals and who has a vested interest in the success of the property.

Q: How did self-management benefit the author?

Self-management benefited the author by allowing them to have better control over their properties and achieve their specific investment goals. It enabled them to grow quickly and ensure that their properties were managed with the care and attention they deserved, as they had a personal stake in the success of their investments.

Q: What is the importance of setting boundaries in property management?

Setting boundaries in property management is important to ensure that management companies operate within the owner's expectations and do not overstep their roles. It helps in maintaining control over the property, ensuring that the owner's goals are prioritized, and protecting the investment from potential mismanagement or neglect.

Summary & Key Takeaways

• The author initially hired property management for a new investment property due to unfamiliarity with the area and to focus on existing operations. However, they found management companies lacking in care and detail, leading to a decision to self-manage.

• Property management companies offer comprehensive services but often lack the vested interest and insight that property owners have. The author found themselves managing the managers, which prompted a shift to self-management for better control.

• The author emphasizes the importance of ensuring management companies have a vested interest and setting clear boundaries. They advocate for self-management when possible, as personal involvement can lead to better property care and achievement of investment goals.