I hold 3 4-unit properties that are borderlining on an administrative burden. I have a business thats doing well and I can not divert time, but I would like to acquire a few more properties.
Today I can only seeing myself having the time to investigate, initial improvement and arrange financing for the props, but I can’t handle the follow-up leaky faucets, etc. One of my tenants was 15 days late before I noticed - I do books twice a month.
How much does a management company cost? Can they improve efficiency to the point where they can be a break even? Am I too small to consider - if so how many unit make this worthwile?
My experience with a management company hasn’t been all that great. They charge me $50 a unit. I only have a few houses but I thought I’d give it a shot to free up my time. However ,a lot of my time is spent on checking up on the management company and figuring out what they did or didn’t do. The good thing about it is anonymity. The tenants don’t know who I am, they never met me which is a good thing. I think at this point though, I would like to manage them myself Until I have mucho properties. My advice is stick it out without management as long as you can handle it
A managment company I used did the following. If you just wanted them to find a tenant for you then it would cost one months rent.The months rent is determined by you for the renter. If you wanted them to manage it also it would be the first months rent then starting the second month it will be 10% of the monthly rent. So lets say the rent is 500.00 then if you want to manage it yourself then you pay them 500.00 after they find someone for your apartment. If you want them to manage it then you would have to pay 500.00 for the first month and 50.00 every month they manage it. I dont like management companies. I had tenants not pay and they did nothing about it until I said either you kick them out or our services are done and I had a lawyer ready to do it for me. I think its better to have them find you a tenant that you will screen before accepting them. Then in the meantime go meet with a local lawyer who deals with evictions. After you find one you like make sure you establish a relationship with them so you can call them anytime with questions and problems that they can fix. Of course it will cost you but you rarely have to call unless they dont pay there rent. My lawyer will charge me 1000.00 to evict them. You can do it yourself but I prefer that method.