I’ve been thinking about starting a company called “The Property Manager”. Actually only in my mind.
The Property Manager would be a machine that manages your property. The perfect manager would be a machine. People actually make terrible Property Managers because they are weak, lazy and try to think. Thinking is actually the weakness of any Property Manager. This machine called “The Property Manager” would send out an eviction letter if rent was not received by the 5th. If rent is received after the 5th, it would mail back the check with a letter stating that “rent received after the 5th is subject to a $50 fee”. Then the Property Manager would set up a court case. “The Property Manager” would only cancel the case if they received the rent + late fee. If a tenant called about a broken toilet, the machine would call the appropriate company to have the repairs made. NO MISTAKES AND NO EXCEPTIONS because a machine doesn’t think, it just does what its programmed.
This is how you pick your Property Management Company. A company that is almost like a machine. You never want a company that will listen to tenant tricks. It will just follow the lease to the T.
I believe there are a lot of investors that know what “should” be done, but just can’t do it. It’s the difference between being a coach and being a player.
propertymanager you are a player and a coach. You know the rules and have the talent and ability to play/manage properties. But most people do not have the talent to play. These people can learn the rules on what should and shouldn’t be done, but they will always need players. I think most investors can learn to cash flow, but REALLY struggle when it comes to managing a property. Property Management is a unique skill that is difficult to learn and even harder to continually follow.
You know the rules and have the talent and ability to play/manage properties.
Thank you. However, I don’t think it’s talent and ability. It’s just that it PISSES ME OFF when someone tries to rip me off and therefore I kick them out the minute the rent becomes late! After all, I’m running a business to make money, not to have some loser steal from me.
I’m actually considering spending a good part of my effort once I get my re license doing property management. Think about it, all of the cashflow and none of the risk! Whether the property is bleeding cash or not I get a built in 8-10% of GROSS rents every month! Downsides of course are a lack of gained equity but hey, its not bad extra cash. Average rent around here is about $1000/mo for a 3 bdr, that’s the $100 a month we’re all shooting for and that is on 50 cents on the dollar homes and homes that are bought retail. 100 units is a 6 figure a year job. One thing to note is that in CT you have to be a licensed agent to manage property and most agents think its a waste of time to do this so it’s probably not too competitive. I think it will be a perfect supplement for me…when the sales market is up rentals are down, when sales are down rentals are up. No matter what I can make money.
Sounds good Rich. It would be MUCH easier to manage someone else’s properties. You would just follow the lease and not care about the other BS. I am getting sick of managing properties and being an investor, wearing two hates basically.
I would start making a list of things that will seperate you from other Property Managers. I am extremely loyal to those I have confidence in (You would be on that list if you were in MN or WI). I image others with money will be loyal to you with your level of knowledge. I would work hard on keeping the expenses to a minimum for YOURSELF and for your client.
Here is some of the things I look for in a Property Manager:
A machine like atmosphere (as described above)
Procedures for repairs
Procedures in writting on how they evict and how they fill units.
I’ll have to think more on what I look for with a good Management Co. Hopefully others will add to the list of good qualities in a Management Company.
That’s one more quick business plan I need to write before I take my license exams in November. I’m also looking to put together a good package for private money lenders to solicit loans. Waiting on my Cowgill book to show up so I can make sure I touch on everything I should to make it happen and do so without violating an SEC regulations.
I used to just have the tenants sign the lease and that was that. But recently I’ve implemented a new practice. Now I sit the tenant down and read the lease to them. I explain exactly what will happen if they mail a check late or if they stop paying. I explain that I can not make any exceptions on the rent. I now walk through the property with a list of things that are wrong and not wrong with the property (both of us sign). I explain everything from taking there shoes off, no smoking in the property, where the water shut off is, where boxes can and can not be stored (furnace, gas water heater). I basically break down the property and procedures for the tenant right away, rather then waiting until there is a problem.
The little bit of extra effort in the beginning when a tenant move into a property has been paying off.
I sit the tenant down and read the lease to them. I explain exactly what will happen if they mail a check late or if they stop paying. I explain that I can not make any exceptions on the rent. I now walk through the property with a list of things that are wrong and not wrong with the property (both of us sign).
I do exactly the same thing, with a very heavy emphasis on EXACTLY what will happen if the rent is not paid ON TIME!