As a new investor when is the best time to hire a property management company?

[Nir]

Hello Everyone,

I wanted to ask when is the best time in your opinion, for a new investor to hire a property management company - immediately after the first purchase or manage the first 2-3 properties alone and only then hire an external company to do it for you?

Here are the 2 option I have with the pro`s and con`s I can think of for each:

1. Hire a property management company from the beginning immediately after the purchase of the first property. This way you free more time from the start plus do not take the risk of making serious mistakes as a beginner.

2. Manage the first properties alone (say first 2-3 properties), learn the process, gain some experience and only then hire a property managmeent company to continue the process. This way, by managing the first properties yourself, you`ll know better what to expect from the property management company as you have done some of the same work yourself. However, you risk making mistakes that could have been avoided by hiring a porperty managemnet company from the beginning.

My situation is a little unique as I will have a LOT of free time in the next 6 months and it would be great if you can consider this fact in answering my question.

The advise I am getting here is highly appreciated as I would not be able to do it without the GREAT people participating in this forum!

THANKS,
Neil

 

[bb2]

QUOTE (investmart @ Jan 18 2008, 08:41 PM) Hello Everyone,

I wanted to ask when is the best time in your opinion, for a new investor to hire a property management company - immediately after the first purchase or manage the first 2-3 properties alone and only then hire an external company to do it for you?

Here are the 2 option I have with the pro`s and con`s I can think of for each:

1. Hire a property management company from the beginning immediately after the purchase of the first property. This way you free more time from the start plus do not take the risk of making serious mistakes as a beginner.

2. Manage the first properties alone (say first 2-3 properties), learn the process, gain some experience and only then hire a property managmeent company to continue the process. This way, by managing the first properties yourself, you`ll know better what to expect from the property management company as you have done some of the same work yourself. However, you risk making mistakes that could have been avoided by hiring a porperty managemnet company from the beginning.

My situation is a little unique as I will have a LOT of free time in the next 6 months and it would be great if you can consider this fact in answering my question.

The advise I am getting here is highly appreciated as I would not be able to do it without the GREAT people participating in this forum!

THANKS,
Neil

Hi Neil

If you have a lot of free time in the next 6 months why not manage them yourself. You will learn a lot about how to effectively manage a small number of properties. This is priceless experience. You will learn what it takes to get good tenants (a feat in itself), what to do when things go wrong, how to deal with repairs and maintainence, accounting issues and a whole lot more.

REIN has an excellant system for "filling vacancies." You just need to follow it step by step. If you find you do not like this aspect of real estate investing you can then hire a professional and you will be in a better position to know what you want in a property manager.

Hope this helps
Brenda Bastell

 

[MicFromMirus]

Hi Neil,

I agree with Brenda.
I have a acquaintance who says, run your business now like you want it to run 10 years from now.
Free up that time for greater potential profit endeavours.

I personally agree with Donald Trump and Gary Eldred who say that you should start out doing your own property management.
This is what I do. I admit that it is probably my least preferred aspect of investment, but I still think that it has great merit and is a wonderful training tool.
There is also obviously the financial benefits of not paying someone else to do the work. This can be particularly important in the initial stages of investment, when finances are tighter.

 

[GarthChapman]

Hi Neil,
I suggest you start out doing everything you can yourself so you learn as much as you can. Then hire out the things you do not want to do or don`t have the time to do efficiently. You will know what is involved and will make much better decisions as a result of your personal experience and will be a much better manager going forward.

Doing this taught me that I actually enjoy being a landlord when I thought I would not like it at all and would be terrible at it. It also taught me what I was good at, and what was important and what to ignore.

Hope that hepls a bit,

 

[mthorn]

Hi Neil,

We started out with just our own and learned tons - as a property manager I much prefer working with a landlord who has managed their own properties as they are much more experienced.
We work with many rein investors who manage their own properties - we are just a phone call away for a quick consult on a difficult matter, helping with a volatile tenant situation - or if you need something done in an emergency and can not make it to town.

Some services we have provided for people who manage their own apartments.
Emergency repairs such as floods, no hot water etc
Negotiating with tenants in a volatile situation
Handing out keys to a new tenant moving in
Delivering one of your own notices etc.
Collecting Keys form a tenant moving out
etc


Have fun - learn away

There also is a great landlord self help service that you can find the info at the LTB.

 

[brentdavies]

As a professionial property manager, I want\ prefer clients who have managed their own properties for a couple of years.

They understand the market place and problems associated with rental properties.

If you have the time, then do your own property management. It is a valuable learning experiance.


Brent Davies, 24 years in property management

 

[Nir]

Thank you everyone for the EXCELLENT advise!

I wll try to manage the first properties myself then..

Neil.