I have 23-units, some houses, and some apartments. My business partner wants to fire our property manager and take over management. Until now, we’ve always had a manager. What are the pros and cons of self-management?
The question doesn’t mention anything about the current manager or the reason for taking over management. Too often, owners make decisions like this out of boredom or flawed logic (justification) rather than operational or financial necessity. I am assuming this is a stabilized portfolio of assets. See my recommendations below.
If the motivation to self-manage is exclusively money or reducing expenses, the outcome will be disappointing. The time, energy, and effort of self-management, as compared to retaining a 3rd-party manager, will not play out favorably. Eventually, resentment, frustration, or a lack of skills will usurp the small savings generated by self-management: the time it takes to provide quality management services is always greater than expected if you are the one providing the services.
For an owner/operator thinking about self-managing, the matter at hand is all about two things; opportunity costs and expertise.
I suggest the following:
This is a simple question with not-so-simple implementation. It’s important to know what you are signing up for and recognize that property management will be an ongoing task in your daily life (daily, not once a week when it’s convenient). I ask you to add to the time commitment because property management is a 24-hour business, seven days a week. Rental property never closes or takes a vacation.
Recognize also that, at some point, you will have to fire yourself, be it age, a health reason, or some other life change. Have a contingency plan in place for a planned and unplanned exit by you – the manager. Life happens.
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