Is a profesional property manager worth it?
I found this article in allthingspropertymanagement.com to be very instructive in what is happening in Lorain County. There is a whole cottage industry of unlicensed property managers out there. Many people are going into it because of the flood of out of town money coming in to take up the slack in the depressed sales prices. Of course out of town money means out of town owners who need in town folks to manage the property hands on.
Salvatore Friscia, a long time property manager recaps a conversation with a down on his luck business owner that mentions off hand he plans to do a little property management on the side to make ends meet.
This is of course a very scary thing that one would think of property management work as a kind of contingency plan. If you are a owner, you want a professional team with a plan and the resources to implement the plan with your property. Repairs need to be taken care of in a timely manner. Your money needs to be handled carefully and you need up to date reports of how your assets are being handled. You need someone who can screen tenants and deal with their complaints professionally.
Steve Aubertin an experienced manager commented on that blog:
In 2005 I began managing a 13 unit pre 1978 multifamily apartment building for a property owner that was new to the business. To make a long story short He thought I was a little too strict about the rent being on time. He thought if I was “nice” his tenants would be happier and get caught up. I tried to explain to him that it was a safer practice to put out notices as soon as the rent was late if the tenant paid it could always be canceled. Unfortunately for me he decided to rely on a tenant as the resident manager, then he tried a couple of other sales agents over the next couple of years.
Finally, about a month ago I got a phone call and they were ready to have a professional manager. The building had a 40% vacancy rate and half of the current tenants were between 6 to 10 months in arrearages.
I have a lot of work to do to get this building back on track but it does make my fee look cheap when you compare it to lost opportunity and rent.
Steve’s comment summarizes my sentiments on this subject well. For years before getting into property management I wanted too. However I was well aware of how risky for my clients it would be to be a part time property manager. So as a company we delayed doing property management until we could put together a team of experienced individuals that we were assured could do an A Plus Job at servicing clients.
We hear a lot of stories of people coming to us after having had a friend of their managing the property and now the property is vacant and destroyed and we have to try and get in their and make it profitable again. It is amazing how quickly a property can go from hero to zero with management that is not quick to respond.