Four Questions to Ask Yourself Before Managing Your Own Property

©2007-2009 Chris Compton

“Do I need a property manager?”

 

This question causes a natural conflict for me, and it’s a question I get asked a lot. As a professional property manager, I have a strong urge to scream out, “OF COURSE YOU DO!!!” As someone who prides himself on giving fair, honest advice in the best interests of my client, I know that the fairest answer to this question is, “it depends.”

 

Four Questions to Ask Yourself Before Managing Your Own Property

“It depends” on who you are, what sort of skill set you have, and how well you handle people, conflict, pressure and stress. “It depends” on where you live in relation to the property. “It depends” on how highly you value your time. Ask yourself these four questions and then judge for yourself.

“Where do you live?” Where you live is a pretty key factor. If you can’t stop by twice a year, you may have problems. If you can’t respond promptly to maintenance requests, you are begging for trouble. If your only recourse when the rent is late is long distance communications such as phone calls, letters and emails, you might find yourself in a hole. One of my very first management clients is a wonderful couple who lives in Virginia and has rental property here in Atlanta. The first time I heard from them they had just gotten a writ of eviction against their tenant. The tenant was out of the property after a difficult two year battle fraught with late payments and threats of eviction. They asked me to check out the home. I could sensationalize the condition, but let’s just call it “abused.” The landlords had been dealing with problem tenants from 500 miles away for two years. They had never visited their renters. If they had stopped by a few times, they probably would have saved several thousands of dollars in repair costs. We fixed the property up and I found a tenant. Over the next year the property was well maintained and the rent was on time each and every month. At the end of the year, my clients decided to go back to self managing and save the $88 monthly fee. The next time I heard from them was four months later. The tenant was two months behind on the rent and they couldn’t get in touch with her. Long distance management is a tough assignment.

“How are your people skills?” Another key issue to consider is your people skills. Good property managers are very responsive. The single most important job of any property manager, whether a paid professional or a self managing owner, is to keep the tenant happy. Happy tenants renew their leases. Happy tenants take care of the property. Happy tenants pay rent on time. Happy tenants don’t call about small repairs they can handle on their own. Replacing tenants is the largest long term expense associated with the ownership of rental property. Keeping a tenant for an additional lease term is like finding an extra 1.5 months rent (or more) in the street. If organization, attention to detail, a positive attitude and a true desire to serve are not part of your makeup, this task is probably not for you.

“What sort of tools are you working with?” The rest of the skills in your toolbox (or lack thereof) will also go a long way towards determining your success. Are you knowledgeable in areas like marketing, accounting, home repair, law, and collections? You should be if you want to succeed. How’s your rolodex? At a minimum you must know who to call to handle repairs involving plumbing, electrical systems, appliances, heating and air, roof leaks, drywall… The list goes on. Remember that job One is retaining your tenant. Tenants with backed up plumbing expect, even demand, immediate attention. Can you provide that? If the answer is “no,” you should probably just call me.

“What is your time worth?” If all of this sounds like a pain in the rear, it can be. Managing one property requires the same tools and systems companies like mine spend years developing in order to serve many properties. Rental homes seem to go through cycles of attention. Everything goes great for months on end and then all of a sudden they need lots of attention for a while. When that happens the manager must devote whatever resources are required to handle the load. Sometimes that translates into many man hours. Only you can put a fair price on your time. In April my family purchased a home in Buford, GA. We loved everything about it except for the purple master bedroom. I don’t mean pastel purple, either. It was like a room full of bruise! I have a painter who does great work for me on my clients’ homes. He offered me a great “friend” price – only $200 including paint and cutting in the trim. I got it in my head that my wife and I could just do it ourselves. The painting supplies and paint came to $110. We spent thirty hours trying to get the trim right and then my mom came down from Virginia and finished it for us. (Thanks, Mom!) You do the math.

At the end of the day, you have to decide for yourself if you need a professional manager for your home. Take a look at the big picture, put a value on your time and decide if you will be better off in the long run with my team or on your own. For the vast majority of homeowners, professional management is a solid value.

After answering these questions, if you have decided to self manage, answer three more. What is your strategy for finding a tenant? How will you screen your applicants? What will you do if you choose a bad tenant?  Remember, if you have any questions concerning property management, landlord/tenant issues, general real estate concerns or just need the best possible team managing your North Georgia Property, call me personally at 770-682-7735.

 

Comments

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