Some of you may wonder, why would someone take the DIY approach to my rental properties rather than use hire a property manager and relieve myself of the burden of dealing with rental properties. Don’t I have better things to do?
As I have stated in another article, I started this journey by using a professional property manager that was recommended to by a local real estate agent. I was in a bind, I was way behind and willing to make a deal. I had recently sold some property and working through the hurdles of an IRS 1031 Exchange trying to invest my money and defer realizing my capital gains.
I wanted something that would provide me with some passive income; rental properties seemed like the way to go. After striking out in a deal in the Houston, Texas area, I decided that the focus should be closer to home. Not knowing anything about being a landlord and no real-time to learn the process, I hired a property manager.
Before I had even signed a contract with the property manager, I had already received a taste of his, as my father would put it, LOC Disease (Lack of Care). The man was over 1 HOUR LATE!!! But again, I was in a bind, had no idea what to do or where to begin, so we moved forward.
The first property was immediately filled with a tenant as the property manager had been managing a property that had been sold and the tenants lease was about to expire. Easy way for the manager to make some money without having to do anything. My second property wasn’t exactly move-in-ready. It needed a little care to bring it back to life, but nothing that couldn’t be handled. Hell, the property manager found a house painter and arranged to have it painted.
After the second property had a lipstick treatment done, it still sat vacant for over 1 month. I would ask questions from the manager to get a sense of the progress and he would state that he received some “bites”, but no solid leads. I then received a phone call from my real estate agent asking me if my property was still available for rent as one of her client’s daughters was looking for a new place. I took all of the information, contacted the prospective tenant, and found that she had been trying to work with MY property manager on MY house already.
This whole time, he had a lead but he was refusing to provide her with a lease agreement for some unknown reason. He would insist that she provide her current landlord with a 30-day notice before he would provide her with a lease agreement and she was adamant that she would not provide notice until she had a signed lease agreement.
When I spoke to him about this, his response to me was “This is the reason why I don’t like owners to get involved”.
This man cost me several thousand dollars in lost rental income and treats people this way. Fired! A 70-year-old man almost sobbing to me stating that “this has never happened before”, meaning that a client had never given him the boot before.
The short of it is that no one will care about your project as much as you do. No one will give you project the amount of attention that you feel it deserves. I was being neglected by my property manager, yet he was going to be making upwards of 10% of my gross rents. 10% for him to drag his feet. I could do just the same thing and save myself a great deal of money!Questions? Comments? Contact DIY Property Manager!