When I first started in real estate, self-management was a given. Like many investors looking to make real estate investing a full-time job, handing over such a large portion of my cash flow to an outside company simply wasn’t feasible.
As a rule of thumb, property management companies charge 8% to 10% of the total rent, plus other fees. I want to keep every dollar I can so I can reinvest it and run my business full-time sooner rather than later.
Soon into my portfolio, I also realized that I could run my rental business with better customer service and a higher level of performance than most companies. In 2021 I purchased an eight unit condo that is managed by one of the most recommended management companies in the area. After the deal closed, I realized the Premier was leaving a lot of money on the table: no pet fees, deferred much needed maintenance, renting at below market rates, etc.
I thought to myself, “How on earth are people paying for this?” I decided right then and there that I would never use a PM company and instead build an in-house team.
Is self-management right for you?
This is not unique to me. Many investors can run better quality businesses than the large PM companies. As long as you can solve the problems, you can become a good self-manager of your portfolio, which means significantly more cash flow and higher quality service for your tenants.
Most of the time, investors choose to hire a professional management company thinking that this will make their investment completely passive. But that’s usually not the case because you still need to manage your managers. Additionally, many property management companies must manage hundreds of properties to be profitable, which means you and your portfolio don’t necessarily get the necessary time and attention.
Often, this means self-management ends up being the better route. If you have to manage managers, why not just cut out the middleman for higher profits and better rental quality? This was the route I pursued in my real estate investing business and the reason I quit my corporate mechanical engineering job less than a year into investing.
Rather than hire a large company that would take up the majority of my cash flow, I chose to self-manage until I could hire an in-house property manager, one that I paid my own salary and worked directly on my team .
Resources for self-managed property
While it may seem daunting, self-managing can actually be very simple, and thousands of landlords practice self-managing and are very successful at it. If you’re on the fence, here are some recommended resources to ensure you successfully manage your property.
books
podcast
If you’re more of a listener than a reader, then these three podcast episodes are for you.
1. Simplify New Year property management Women Investing in Real Estate Podcast
This episode tells you why it’s important to remember you’re a business, not just a landlord, and that you can scale, adding systems and processes to your day-to-day operations while keeping things in-house and professional.
Having the right systems and processes in place is crucial to preventing emotions from affecting your business. It helps you deal with problems that arise in a systematic way, preventing you from making emotional decisions while managing your time effectively.
The three most important areas where REI business can often be streamlined include:
- Tenant screening
- rent payment
- maintenance request
This episode also dives into the benefits of simplifying property management and the first steps you should take.
2. Remote investment and self-management 9 doors deployed by BiggerPockets Real estate rookie podcast
Caleb served in the Army for 14 years and after joining the Special Forces he was deployed for six months at a time. During those six months, his house sat vacant. That’s when he saw his opportunity.
Caleb decided to rent out his house through Airbnb. As a new host and Airbnb host, Caleb has had to learn by doing, which has become increasingly difficult since he’s managed himself in Iraq, Afghanistan, and Africa. He met this challenge by building a team that could handle things he couldn’t.
After several years of investing alone, Caleb joined a partnership to expand his portfolio and increase profits. His partners were also abroad, so they shut down the on-call staff and figured out how to automate the check-in and check-out process. As the business grew, the partnership adapted to ensure its longevity. Caleb now hopes to continue growing his business, growing his personal portfolio and building wealth in the background.
3. Self-Manage Your Real Estate Like a Pro with Dana Dunford Real Estate Investor Show
Dana Dunford is CEO of Hemlane, a technology-driven property management platform. The best properties aren’t always the ones in our own backyards, which is why Dana is a big advocate of buying property anywhere.
She helps real estate investors do this by identifying property management pain points and finding ways to improve management efficiency. The result: a smart process that manages rentals remotely while connecting them to local licensed professionals.
In 2018, Dana was named one of 20 female leaders and influencers in commercial real estate technology. She brings a unique background to real estate, having worked on Apple’s global financial planning and analysis team and earning an MBA from Harvard Business School.
By the end of this episode, you’ll be able to self-manage your property so well that your tenants will think you’re using a full-service PM!
Facebook group
- Real Estate Rookie Group: Whether you have no property or 20 properties, the Real Estate Rookie Group is a great community to ask all your questions about rookie investing and learn from others.
- Women Investing in Real Estate (WIIRE) Group: In this tight-knit community, you’ll find everything from thought-provoking questions to actionable advice and inspiring success stories to inspire you to take the next step in your real estate journey .
final thoughts
Whether you’re new to managing rental properties or are looking for a better organized and systematic approach, these resources will teach you how to do it. Remember, running a great rental property business is important not only to you, but also to your tenants, so they are happy and stay at your property for a long time, making management easier for you and your The profit is greater.
Save time and money with this refreshing guide to managing your own property.
exist self-managed landlordAmelia McGee and Grace Gudenkauf share tips for efficient property management, tenant screening and onboarding, and scaling your business, all to help you escape the 9-to-5 drudgery and create lasting wealth through real estate.
Notes on BiggerPockets: These are the opinions written by the author and do not necessarily represent the views of BiggerPockets.
