Property Management

By
Real Estate Agent with ReMax Plus Realty

Property Management - Is it worth it? Our office has just recently dove in head first to Property Management. There seems to be a need for this service in our area, but it seems the con's highly outweigh the pro's. It is very time consuming, not to mention the liability involved, but we are in hopes of turning some tenants into buyers. One of the advantages I can see is developing a relationship with the tenants, so when they are ready to buy they will hopefully call on us. Any words of wisdom on this subject?

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the man to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the printer to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Show All Comments
Rainer
25,159
Richard Perkins
R PERKINS REALTY - Stockton, CA
I feel there is a need for good property management! Good luck I think the pro's outweigh the con's
October 13, 2007 02:04 AM #1
Anonymous
Anonymous
John Finkle

Go after commercial properties!  The REAL money is in the servicing of the properties.  Sure, collecting the rent and dealing with the tenants gets you some money, but the big money is in hiring out the servicing of the property - be it maintenance, lawn care, janitorial, etc.  You need to diversify.  First thing, start a separate company or companies.  Put items out for bid then hire someone to do the work cheaper where you'll still retain a spread for yourself, plus you save the tenants money by being cheaper.

Let's say you manage a commercial office building.  You're making $1800/month collecting the rent, the lawn maintenance company you hire is making $3,000/month, and the janitorial company you hire is making $7,000/month.  The lawn maintenance company and janitorial companies were the lowest you could find out of 5 big reputable companies when you put out for bid.  Do you want to get into the lawn care business and spend thousands of upfront money on equipment?  Probably not.  Do you want to get into the janitorial business and spend a few hundred bucks to get it started then hiring one or two people to do the dirty work for $12 bucks an hour when the job takes one person to do it 30 hours per week?  So you cut the cleaning bill $2,000 a month from $7,000 to $5,000, saving the tenants $24,000 a year, You spend $1550 a month hiring someone to do it leaving $3,000 per month (in roundabout numbers), of course there is work comp, insurance etc.  Make sure the property owner knows what you're doing upfront.  If they're agreeable, and why wouldn't they be, you're saving the tenants money but you will be taking a chance the Landlord might want a piece of the action.

So, $1800 a month goes to $4800 month overnight.  Time consumption hasn't increased significantly at all.  Nice stability as long as you hire someone good - it's a night job. 

 Apartment tenants are a pain and most lie.   

October 13, 2007 03:41 AM #2
Rainmaker
151,886
Nancy Moeller
Seven Gables Real Estate - Anaheim Hills, CA
We're about to start PM in January. Please keep us posted how you are doing.
October 13, 2007 05:10 AM #3
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the airplane to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Show All Comments
Rainer
1,297

Becky McGuire

Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the scissors to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase: