When I purchased my first single-family home as a new real estate investor, I had no concept of the amount of work that would come along with owning a property. And man, did I learn quick! My time was eaten up with details that a property management company could have handled easily. I have made mistakes throughout my career as a real estate investor, but by far, the biggest mistake I made in the beginning was not hiring a management company. You can always make more money, but you can never make more time. In exchange for the management company’s fee taken from the gross rent, you will be granted the peace of mind and more time to be spent on other tasks.
Distance is good
Tenants can be a headache. Not all are difficult, but many can be. I once made the mistake of telling a renter to, “feel free to call me.” I realized only later (not too much later), that this was a very bad idea. Most of this tenant’s calls were outside the realm of the property, and in fact, were personality matters. I had to remind this person that I was not their shrink, and remember to hire a property management company from that point on. Management companies will take care of situations with renters that tend to eat up your time as the owner.
Pick a hat
Focusing on higher value activities creates success in business and life. Being an investor, owner, and property manager usually proves to be too many hats to wear. Now, I have a management company where I can simply oversee the employees and delegate tasks to them. This allows me to pay more attention to purchasing new properties, as opposed to micro-managing the investments that I already own.
Other People’s Problems
Good property managers often have a strong propensity to solving other people’s problems. Dealing with drama or complaints from a tenant is something that they actually enjoy. This is not something that I enjoy as it takes me away from my focus and productivity level. I am more focused on how I can further assist a tenant’s comfortability and level of contentment at their rental, in the hopes to decrease renter turnover. Generally, this means that I look at “bigger picture” problems as opposed to minor detail and day-to-day concerns that are a property manager’s specialty.
Stick with your title and don’t deviate from your descriptions. If you are investor; you invest. If you are a property manager— manage. Investors invest. As a property manager, it’s a requirement to problem solve; listening to everyday issues that occur around the property.
As an investor, you are also a problem solver, but in different ways. You find investments that will offer the greatest return for the cost and bring that to the market. Over the years, I’ve learned through both mistakes and success how important it is to find ways to simplify your business strategy and streamline your success. Adding a property management company to your working model is essential to maximize your time in the short-term, which will in turn, maximize your profits in the long-term.