Statistics say that over 70% of all rental homes are managed by DIY (Do-it-Yourself) Landlords instead of Professional Management Companies. Statistics also show that over 90% of landlord “nightmare stories” (Non-payment of rent, excessive home damage, painful evictions, unlawful occupants, illegal drug houses, fake service animals, etc.) come from homes managed by DIY Landlords. Just knowing those statistics, it seems hard to believe that anyone would risk the path of the DIY Landlord but many do!
There are numerous Facebook Groups and other internet sites where DIY Landlords can get together for advice from one another. When the question is asked in most of these groups, by a potential first-time landlord: “Should I hire a Property Manager”...the most frequent short response is “No...do it yourself and save the money”. However, a common theme with most of those answering are the ones who have had a poor experience before with a property management company or who have been fortunate enough to have not experienced the 90% of landlord nightmare stories...at least not yet!
SELF MANAGE vs PROFESSIONALLY MANAGED
Self Manage vs. Professionally Management...that is a better question. Let me start out by saying there are POOR Self (DIY) Managers..and POOR "professional” managers. Additionally, let me be transparent about who I am and what I do. I am an investor and a professional property manager. I own numerous investments (long term, short term, and vacation rentals), I also invest in rehabbing homes. Some I buy and sell (“flipping” without the negative connotations) and others I buy and hold. I also run a professional property management and real estate company in Florida and have dealt with thousands of homes over the past two decades.
I started out like many new Landlords but have matured through the stages of self managing and professional management. For full transparency, I started out with “professional management” (but I did a poor job selecting the manager) and eventually fired them and became a DIY Landlord/self-manager. Over time and as my portfolio grew, I evolved to full management for all my rentals and in each of the geographic locations, I have rigorously chosen a solid PM to take care of my rentals. I am what you would define as a “happy” landlord. My rentals are all high performing, with exceptional ROI (Return on Investment), have little to no vacancy, occupied by superb tenants, and result in top-of-the-market results.
FACEBOOK GROUPS AND INVESTOR SITES
If you want to be convinced why not to hire a property manager, just ask the “rookie question” in any of the lovely investor focused Facebook groups or sites. So long as you have thick skin and don’t fall victim to online bullying, you may not succumb the overwhelming peer pressure to just “go it alone...like me” posts that will riddle the thread. While those pages tend to beat up on PM companies, to be fair you will find just as many posts that start with "Help...I have a problem"...from Self-managers. Make sure you take an additional five minutes to scroll through the posts of the nightmare situations that have transpired in the feed over the past month. Then amidst the flood of DIY-ers encouraging you to join, remember what your Momma told you about how “misery loves company!” So keep looking for those posts that point out the pros of hiring a professional PM company.
As you do, you may see many that give very simple reasons for hiring a property manager, especially if they are faced with the tyranny of distance and varying time zones. Now, having said that, while "convenience" and "peace of mind" are good reasons to hire help, true professional PMs should provide a much greater scope of services.
WHAT DOES A PROPERTY MANAGER DO?
A great property management company is supposed to do TWO major overall things: 1. Increase your ROI (Return on Investment) and 2. Reduce your Risk. Those two missions are walked out simultaneously and are intertwined with each and every process/procedure/task that they perform. Within those categories are a million sub-tasks that they could be doing and this is where no two PM companies are 100% alike, so before you hire one, you should know exactly what they are supposed to do for you, so you can make the initial choice wisely.
Today’s professional management company should combine yesterday’s quality customer service with today’s technology to streamline processes, while making all parties feel like they are being properly taken care of. The PM has a fiduciary responsibility to the Landlord but they also have critical responsibilities on behalf of the Landlord, to the tenants residing in the home. Most “rookie” landlords believe their home is the #1 asset and believe that tenants should be dealt with in a dictator-like manner. Nothing could be farther from the truth. More “seasoned” landlords realize that the tenants are the “performing” asset and without quality tenants and proper management their home is nothing less than an empty depreciating asset that will quickly become a burden in many ways. Not to mention a tenant that feels alienated, ignored, or unfairly treated is much more likely to not properly care for the property or even damage it.
KNOW THE RULES OR HIRE SOMEONE WHO DOES
Tenant/Landlord Laws very from state to state and even down to local levels. Additionally, they are always changing. Through 2020-2021 the rules were changing on just about a daily basis. An experienced PM is worth their weight in gold in today’s rapidly changing environment. A professional PM's true colors come out when the "going gets rough". Today there are still some DIY Managers & PMs that don't understand the difference between the CARES Act, Eviction Moratorium, and the CDC Order (THREE separate things that have different rules, timelines and consequences). There are DIY Managers & PMs who have no idea how to evict a tenant in the COVID environment and have no clue which guidelines they have to follow...or more importantly, which paths exist for proper evictions. Additionally, there are DIY Managers & PMs that have no idea how to properly handle a Holdover Tenancy in the COVID landscape, as compared to before it. Honestly, there are some that don’t even understand the subjects or acronyms I just discussed in this paragraph. That is why you need a truly experienced professional PM company to help.
I have seen the sheer wake of destruction left by both DIY/Self Managers and PMs when steps were improperly done (poor tenant selection, poor backgrounds performed, inadequate leasing documents, poor oversight, lack of correction to lease non-compliance, lack of timely action, poor inspection habits, poor preventative maintenance, poor required maintenance, improper eviction handling, improper service animal screening...the list goes on and on. In short, if any challenges come up...you are going to be eternally thankful if you have a true Professional Manager in your corner. If not, you are going to have to find out all the rules, regulations, guidelines (nationally, state-wide, and local municipalities)...and hope they aren't changed daily by anything like a "global pandemic". While there are a lot of experienced voices in the Facebook and Investor groups to help guide you...sometimes seeing 75 different answers to your single question can leave you more confused as when you started!
A PERSONAL STORY
For my personal portfolio I have chosen professional property management for all of them. I can tell you without a doubt, it has saved me time, money, effort, stress, etc. One of my vacation rentals was hit by 3 hurricanes before I ever even visited it. My PM there is AWESOME! I consider her a close friend and we have never met. She is a true professional and I can tell you she was on everything "like a hobo on a ham sandwich." She knows the rules/regs, stays on top of the COVID changing environment, has the tools/resources/contacts to make my ownership a breeze! I figure in the cost for her like any other investment cost and without her, my ROI wouldn't be nearly the same.
If you managed to read to the end of this blog, then you are probably already leaning toward making the right decisions. Regardless of whether you choose to try it alone or go with a professional company, it looks like you are going to be one that does plenty of research. Hopefully, your journey will be a great one. Our staff at Navy to Navy Homes is always willing to help you, even if you are only looking for advice. So don’t hesitate to reach out for help, whenever you need it. Good luck with your rentals either way you choose!
About the arthur: Mario Gonzalez is a 24year Navy Vet. He is the Broker/Owner of Navy to Navy Homes and is an active investor, realtor, property manager, instructor, mentor, and philanthropist. His company gives back 25% of all sales commissions to military, veterans, first responders, medical professionals and teachers who buy and sell homes with their company. His passion is helping people and he is always available to those in need.
Navy to Navy Homes
10605 Theresa Drive, #5 Jacksonville, FL 32246