Plenty of real estate investors hate property management.
They see it as a massive pain and unpleasant part of their real estate investing business. They see it that way because they do not know how to do it right!
Property management is not something you just innately know how to do – like breathing. It isn’t like that at all – it is a highly specialized set of skills and knowledge that when applied correctly makes it even fun! Yes, I said fun!
But that’s not how most people do it.
The more typical approach is through trial and error. Even becoming a “real estate investor” often happens by default instead of intentionally. I learned that when I first started working for a large property management company many years ago. What often happened was that an owner would get a job transfer, or divorce, or marriage – something that caused him or her to relocate out of the area.
At first, they usually tried to sell their former residence.
If that wasn’t successful fast enough the backup path many took was to rent the property out in an attempt to at least offset the mortgage payment and other expenses. In many cases, this could be done and the home produced enough rental income to cover all it’s normal expenses and upkeep.
Sometimes the owners decided to go ahead and keep the property as a long term investment – other times they would just bide time until they had a little more equity or the market in the area improved to the point they could sell it for what they needed and then they would relist it for sale.
Other individual investors got started because they read a book or attended a seminar on real estate investing and some chose rental properties as a path. So they went out and bought a run-down house, fixed it up and made it pretty then went in search of a tenant. Their education consisted of a chapter or two in a book and the instructions on the office store lease agreements they bought. That’s about it.
You need to be able to attract prospective tenants. There are multiple ways to do this if you know how. Once you have prospective tenants you need to screen them and disapprove those who are not a good risk. Again there are specific ways and criteria to do this systematically – but if you do not know what you are doing and you put a bad tenant in your property – then it becomes a nightmare!
This is the experience that causes so many people to bash rental properties and property management.
Even when you have a good property management company handling your rentals for you – you have to manage that relationship and stay on top of making sure that things that need to be done are actually being done on your property -whether you own one, ten or even more. You have to communicate and get information from your property manager on a regular basis – otherwise, you are just hoping they are actually doing what needs to be done. But you won’t know for sure unless you manage your relationship and get the information you need.
When I got started with my very first rental property I didn’t know how to do it correctly either – and I learned some hard and unpleasant (and expensive!) lessons about what happens when you put the wrong tenants in your property. Thankfully I was fortunate enough to get a ton of experience quickly and I learned very fast how to do it very efficiently and systematically.
The difference in approaches when you know what you are doing and when you are clueless is the difference between day and night.
If you are going to own rental properties and be a landlord/property manager – even if you intend to hire a professional property management company – take the time and make the effort first to learn what you need to know to do it right!
Luckily there are far more resources available to you today than there were just a few years ago.
Whether you get your information and training from me or from someone else – make sure you get it BEFORE you become a landlord/rental property owner! If you have already started – then get some training NOW!