When does it make sense to hire a property manager?

[Anonymous No.10769512]

I own three rental properties (two houses and a duplex), and draw in about $2700 in revenue from them every month. I don't want to be and never planned on being a landlord, dealing with tenant shit on a daily basis and want to hire a management company to deal with things like minor repairs, rent collection, lost keys and whatever.

Trouble is, after budgeting out money for repair fund, property taxes, mortgage payment, and insurance, my cash flow on the portfolio is only $550. If I'm paying a management company 8% of raw rents, I'm only keeping $332 a month in cash. It isn't terrible, especially because it'd be damn near wholly passive, but I'm trying to build that income up as quickly as possible and focus on doing flips and wholesales for more immediate income until my portfolio gets big enough to replace my income.

So on the one hand, doing that shit eats up a huge portion of my profits every month. On the other hand, doing it would also free up my time and obligations so that I can focus on more immediate fund raising. When did you hire a property manager?

[Anonymous No.10769563]

>>10769512
I'm trying to buy a new house, but I'm underwater on my current house. I've been thinking about trying to rent it out and was curious about this as well. Not a lot of info out there about property management. How bad is it doing it yourself if it's just one house, OP?

[Anonymous No.10769572]

I didn’t read your whole post but maybe you’ll find this useful. My landlord is basically a slumlord but we don’t really care because the rent is very cheap for where we live (east coast mecca). He gets a tenant at each of his properties to act as his property manager for a rent reduction of a couple hundred a month. It seems pretty ideal because the person is almost always on-site anyways. Maybe this system could work for you.

[Anonymous No.10769581]

>>10769512
With the $218 extra a month, you free up your time in which you can do something that gets you that much money back in a week. It's a no-brainer.

[Anonymous No.10769586]

>>10769512
just put some numbers together. How much, effectively, are you earning per hour of work spent land lording? If the number is too small to seem worthwhile, you'll probably want to find a property manager.

Another consideration: if you intend to keep acquiring properties, it might be a good idea to delve into the property management market earlier on so that you have some knowledge, connections and hopefully a person/company that you trust. It would be better to get it sorted while the stakes are smaller

[Anonymous No.10769708]

>>10769563

It's not bad, but tenant selection is key and it's worth it to take your time screening them. The better the tenant you've got, the fewer problems you'll have. You can advertise for free on craigslist or near free with a for rent sign. Check what the going rate for rent on comparable property in your area is so that you'll be competitive with them, and make sure that any minor repairs or whatever are up to snuff so that people will actually want to live there. Also, be sure to take good pictures.

Honestly, if you're just wanting to rent one place you probably don't need a property manager. Especially if you're planning to stay in the area. If you're moving away to where it'd be a pain the ass for you to hold on to, then I'd consider management if you can raise your rent high enough to keep cash flow positive.

>>10769572

In my situation that strategy probably wouldn't make sense, but thanks anyway anon. A proper property management firm would probably cost less for what I need and would be more reliable.

>>10769581
>>10769586

Thanks anons.

[Anonymous No.10769764]

you only net $550/month on three units? sounds like you did a poor job of shopping for property.

[Anonymous No.10769784]

>>10769764
four units actually, yikes. One well chosen unit should cash flow that much...

[Anonymous No.10770000]

>tfw too intelligent to own property
>tfw live out of a car in a high cost of living area
>higher salary as a result
>able to invest $200k/year

Only 5 years of this and i'll make it.