DIY Landlords

I just read an interesting article, proffered by a national real estate franchise operation.   I continue to marvel at the length of experts in the field of property management, who have view points that just don’t add up.  Let me explain about this one…………so what the author suggests is that professional property managers are more efficient than direct owners, at managing single family properties.   Which then leads to the conclusion that all single family owners should hire a property manager.

The article goes on to measure the above by using statistics that the average annual income of the single family investor is $100,000, and that their time is worth basically $50 per hour, and they spend 49 hours a year managing their rental…….so by the time you get thru the article, the author is trying to convince the reader that by professional property managers charging 10% per year in fee for services, plus one standard turnover of 1/2 of a months rent per year, and if the rent is $1,000 per month, the professional manager is more efficient as to the measurement of cost versus the 49 hours spent times $50 per hour of the owners time valuation.  NOTE:  Email me if you want to go over the math :),

And I’m like huh………what happens if the rent was really $3,000 per month?  Or what happens if the management firm charges 10% monthly fee, plus another 10% oversight on maintenance, plus self performs maintenance with it’s own payroll paid maintenance team with more profit built in, how about that math?

What the author misses here isn’t the efficiency of the 10% fee, it’s that owners don’t trust us.  I say us, because I manage property too.  But trust aside, where I see the real gap happening is not keeping up on market of rents.  Of course, I’m on the west coast, our economy is arguably different than the mid-west, and I’ve been on parts of the east coast in many places, where rents are just stagnated too.   So there may be no gap to consider.  But if there is a gap, then a good property manager knows what to do, and when the dust settles, the owner could have ZERO hours invested, the property fully rented, and be money ahead in total income.  That is a good deal in my book!

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