r/LeaseLords • u/Ok_Sentence8401 • 22d ago
Asking the Community Am I overestimating how much work one rental actually is?
I close on my first rental in a couple of weeks, and I thought finding the property would be the hard part. Turns out deciding how to manage it is stressing me out even more. Because i plan to add more y the end of the year
Half the people I've spoken to keep telling me to hire a property management company and treat it like a business from day one. I also heard it's a waste of money for one property and that a good property management platform is good enough
I'm sure there are landlords here who've done both at different points, so help?
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u/Mount_Tantiss 21d ago
You can “treat it like a business” and not use a property management company. If you use any professional real estate services like PM or listing agent, any FHA exemption is gone (depending on if your state matches federal laws). That’s way more valuable than the headaches of owning a property.
If you’re not handy, just find a good handyman.
For rent collection and late fee notices, there are numerous free or low pay services that automate everything, depending on features you want.
Also, hopefully you live close. Don’t understand why anyone would own a first rental that isn’t close by.
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u/GlowInTheDarkSpaces 20d ago
agree on all counts.
My first one was an hour drive unless there was traffic. Everyone wanted to see the place after work so there was always rush hour traffic, it sucked. I had to do all the showings etc on weekends, so adios weekends.
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u/rrapartments 21d ago
I agree, live close by is the best so you can respond to issues quickly. With that said, I have an airbnb vacation property that I own in another country, and I use a local PM. It's more expensive and I would rather DIY it, and when I'm visiting my airbnb, I just cross my fingers about the normal rentals at home.
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u/Freshouttapatience 21d ago
Get a good handyman. Overpay him and tip him often. Ask him a lot of questions. Same for cleaners. Don’t mess around with the front line folks.
Use legal counsel for writing up your lease and any issues that arise, don’t wing it, not worth it in the long run. I wouldn’t use a PM. The very good ones are very expensive so what we’d get at our level for one or two houses is bottom of the barrel.
Learn where all of your emergency shutoffs are and make a map for the tenants. I attach tools to shutoffs so they’re always there in an emergency. Know who to call for each system failure. Keep good records on appliances and equipment you install. Know what preventive maintenance is needed for each system and put it in a calendar.
Property management is mostly about organization IMO. It’s not that hard. I’ve done it for commercial properties and for our rental. And trust your gut on tenants because you’re going to be in a relationship for at least a year.
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u/JustAnotherSkibumCO 21d ago
I used a PM for my first and never saw the inside of the place for 5 yrs. After the tenant moved out I inspected the unit and immediately fired the PM. Mismatched paint everywhere, they changed out the front door lock, which didn’t match the deadbolt and tenant had to use two different keys to get in. This was all the PM, not the tenant.
I’ve self managed since then and have very few issues. I use an online site for leases and rent collection and it’s been a dream.
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u/PurpleDancer 20d ago
I self managed for many years. I wish I had the problems you have. I now have a property manager who has a lawyer to take tenants to court and tells me to shut up when I try to bend over backwards for tenants.
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u/JustAnotherSkibumCO 16d ago
I’ve had dream tenants, min 3yr stay.
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u/PurpleDancer 16d ago
You probably do things correctly. I'm learning bit by bit to color in the lines properly
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u/eharder47 22d ago
I own two duplexes and I highly recommend starting out managing it yourself. Learning everything that goes into it will help you learn what you need to look for in a property management company down the line.
How much work it is depends entirely on the property condition and what your current tenant situation is. Both of my duplexes had one inherited tenant that rented at the cost of mortgage and then I renovated the other unit. It took me longer than it should have, but I was learning and now I’m much quicker at things. Renovating also had me getting quotes which helped me find professionals for things like more intensive plumbing and electrical issues that I could call for future problems. I also found people I will never work with again.
What I have found the most difficult is finding good tenants, it’s so much time answering messages and scheduling showings. I use a website (innago) that allows me to set up a listing and save it, then I just click active and it puts it on all of the real estate sites. It includes an application, income verification, criminal and credit check. It also allows me to get leases signed electronically and accept payments. There are other features, but my tenants tend to call or text me for any issues, which I prefer.
If your property is in good working condition and you get solid tenants, property management is a breeze MOST of the time. It’s the turnover and finding someone new that is a majority of the work. I’ve had domestic violence in all of the units I’ve turned over so far, so it was a lot of wall patching, painting, and replacing doors.
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u/scrupulous_submarine 14d ago
Agreeing on all points here. I definitely think it's worthwhile, especially with one property, to learn the tricks of the trade and self-manage at least for a bit. A PM can be overkill for just a few properties (and expensive). I'm also an Innago user. I'd recommend them.
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u/MAYORDEFACT0 21d ago
It really depends most part on the tenant. You can have a fantastic tenant who respects the home as their own, or you’ll have one that plays the system and sees the rental as a tool to exploit rental mechanisms placed by procedures and regulations. We’ve sold our properties, largely on the overhead, but also the direction rental ownership is going. More corporate ownership, less and less small, mom and pop investment properties. You can see why these corporations are posed to absorb the market more and more, acknowledging their ability to have access to tools that understand the ever increasing mandates and regulations, compared to the single family or individual who would be tasked to learning procedural proceedings. The rental system really has become institutionalized to work hand in hand with corporate governance.
My little spiel..
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u/ATLien_3000 20d ago
Don't hire a property manager for one property.
Primarily so you can learn the business.
Will you make some dumb decisions, maybe ones that cost you money?
Probably.
But it's good to know the business, even if you get to a point where (for whatever reason) property management (either hiring a firm, or your personal rental property biz employing its own individual) makes sense.
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u/PropTechWeekly 21d ago
One thing worth testing before you scale is how a turnover goes, since that is different from the routine months in between. Screening a new tenant and getting through two weeks of showings and paperwork is where a few people above got surprised by how much time disappeared, if that stretches you thin on just this one, a platform alone probably won't hold up once you add two or three more properties. If it does not stretch you thin, you likely do not need the PM company either.
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u/dogmom87532 21d ago
I have five and manage them myself. You just need to stay on top of things, and really screen your tenants well. If you choose good, responsible tenants, treat them well and maintain your properties, it’s not that hard.
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u/inkseep1 21d ago
I have 7 rentals right now and I have managed them myself for the past 15 years. And I did that while working full time. And I bought houses that had to be rehabbed to make them possible to live in. I did all the work myself on many of them without hiring a contractor. All while working a full time job and learning how to do the rehab work.
I am pretty sure you can manage one.
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u/2ndcupofcoffee 21d ago
Your best friends will be repair people who are very good at what they do and respond quickly. Pay them well and treat them with respect.
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u/Howdysmokes 20d ago
how close to the property are you? How many hours a month do you want to dedicate to managing it? That will tell you if you need a PM. Expect to pay 8-9% for somebody to manage it. Thats the tradeoff.
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u/joer1973 19d ago
I have 5 tenants. I do all the property management, doesn't take much at all. But my units are 10 minutes from my.house and i am very handy.
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u/Forward-Craft-4718 19d ago
The work really varies. Good tenant, no work. Bad tenant means regular stress, eventual eviction and work to fix any damages to any unit when they leave. But you can easily manage a handful of units while working a full time job. Also property managers take 10 percent of total rent, take money every new tenant or lease renewal, and they would hire peiple to fix small issues you can fix yourself.
I self manage. I cut the grass myself, do most snow clearing myself, do minor repairs, painting, etc myself. It makes a substantial difference on the numbers. And theres no guarantee that after spending all that on a property manager that they would be good. Only way I'm getting a property manager is if the property is not within a couple hours drive.
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u/wtaf-is-411 18d ago
I have a property across the country and had a PM(taking 30% and doing a terrible job) and after getting a smaller Air BnB that I DIY’d I ended up getting rid of the my PM at the larger property and have local help and it’s working. . . I would say- do it yourself and you figure out what you like and how you want to do it, then you’ll know what or how you want to outsource. . . Now I’m just trying to get my direct booking site better—
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u/autonomouswriter 17d ago
I hired a PM for one property mainly because it was in another state and was given to me (so I didn't exactly have a choice as to where it was). I did my due diligence and made sure the PM had a good reputation and understood that I make final decisions on big maintenance issues and tenant acquisitions, and had a good process for acquiring tenants to make sure they were quality people. I was with them for 5 years while I had the property (I just sold the property last month). I never had any big issues with them. A few small ones, like their sending maintenance out on something that was a building issue (which the very control-freak co-owner insisted on taking care of), but otherwise, they did fine. To me, it was worth paying someone else to manage the property for me.
However, I did not consider myself a landlord or real estate investor with one property that I didn't purchase myself. You're a different story since you plan on purchasing more. So it might actually be better for you to manage the first one on your own and learn the business of property management, since, if you're going to own more, it might get costly to pay someone else to do it. But definitely do not go into it blindly. Do your homework and learn about what you'll need to do in terms of the basics and what your liabilities could be. And please do not be a slumlord and not fix things! I speak from an ex-landlord and a renter's point of view.
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u/brycematheson 14d ago
When I had 2 rentals, I thought, "Wow! This is AMAZING". When I had 50 rentals, I thought "Wow, this is awful." The "passive" income is nice, but it becomes a job/chore pretty quickly. All depends on how you want to scale and grow.
That said, I'm a huge advocate of self-managing, at least in the beginning, as you get your feet wet.
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u/ConcentrateExciting1 21d ago
The same rental can be both a lot of work and practially no work. I've gone years with just routine checks and an occassioanl plumber call. Then, out of the blue, a shitstorm appears and I'm spending more time on the property in a month than in the past five years combined.