Hello REI world! Cam Dunlap back again with some more helpful info for your investing efforts.
I’ll never NOT use a property manager.
Pretty interesting topic, if I do say so myself. 😉 I’ll get right to it…
So, I do deals in Florida. And I’ve got a property manager down there whom I’ve been working with since the late ’90s. The property manager finds me deals and also helps me sell deals through his network of property management clients.
I often come across properties where the owner is burned out and done — they don’t want to do it anymore, and they’re selling…
They’re motivated.
Of course, I know a lot about their motivations through my Motivated Seller Data Feed. What’s really cool about that system is that you can plug in any address in the U.S., and it’ll tell you if there are motivations or not. It’ll tell you all about the owner and their location and contact information and all about the property, bedrooms, bathrooms, assessed value… all that useful data.
It’s really cool for a reverse lookup.
See, my property manager will bring me a potential deal and tell me the address of the property, and I immediately put it in the system to learn all about what’s going on — at least from the public record perspective, in terms of behind on their mortgage, behind on their taxes, bankruptcies, vacant — all that stuff, which is a really helpful and interesting tool.
We generally use it to source leads, but another way to utilize it and another way to look at it is as a research tool when a lead gets brought to us.
It’s dawning on me that that’s something we don’t talk much about, and it’s a big reality in terms of the usefulness and power of that tool.
Why managing your own rentals is not “awesome”
If you’ve got rental properties, and you’re managing them yourselves, first of all, I would suggest that no one should manage their own rental properties and that you’re trading your sanity for maybe 8%-ish of the gross rent.
What I can tell you for sure is that to me, a good property manager is like a good accountant where they save you much more than they cost you. The decision whether to utilize them becomes common sense.
Keep that in mind because we should NOT manage our own properties.
Property managers are going to do a much better job of that.
Why?
Well, our incentives are well in alignment. Their incentive is to bring in as much revenue as possible… because they’re paid on revenue. And because of that incentive, they’re going to choose tenants very carefully…
They’re going to enforce the rules for non-payment very swiftly. They’re going to raise rents when the market dictates that, regardless of how you or I happen to feel about it or whether or not we would raise rents, they’re going to do it.
They’re going to renew the lease for a good tenant, and they’re won’t for a bad, and they’re going to make the tough decisions. They’re going to do the things that when we’re managing our own properties, we may find difficult, because our incentives are completely in alignment.
It’s all about revenue.
I’m telling you, if you’re managing your own properties, your tenants are walking all over you. You know I’m right. I’ve been there, done that.
And the full circle lesson is that not only will property managers manage your properties, but they could become a very significant source of leads for you too.
And those (smart!) reasons why I will never not have a property manager working my properties for me.
It’s a no-brainer. Perhaps you should follow suit.