- It is an avenue that provides to potential for complete financial independence, but can at the same time lead to financial ruin if you aren’t wise with your investments. It’s also extremely time consuming, and often times leaves you realizing that your world literally revolves around your properties. So, how then do you decide when enough is enough? At what point to do you decide that it’s time to bring in help to manage your growing real estate portfolio? Well, only you can answer that question. But, this article can help provide you with tools and advice to help you better make an informed decision on this particular matter.
The first and most important piece of advice we can give you is that regardless if you decide to bring someone else on board to help manage your properties or not, always, always, always, build in at least 10% for property management. Now you may be saying “I don’t need to do that.” I’m managing the property myself. Well, that’s great! So then pay yourself. After all, you would never expect to work for anyone else for free, so don’t work for yourself for free. Plus then, when you have this already budgeted in. It makes it a lot less of a financial burden on yourself to make the transition when you do decide to bring someone else in to help manage. Reason being, you already have the budget for it, and are ready to go.
- The next thing to think about is The Gap. The Gap is just a term that real estate investors use when addressing that in between stage of when they still have to work to stay ahead of bills, and when they can quit to focus on real estate full time. It’s often in The Gap period, when an outsider needs to be brought in to help manage. This is because an individual doesn’t have the time to manage all their properties, but also can’t afford to quit their day job.
Another thing to think about when making investments is the quality versus quantity debate. You need to ask yourself if you’d rather go for more quality investments, where 5 units can bring in the same amount of cash flow as 20 units. Neither is a bad investment, it will just depend on how much work you’re able to handle, and if you are able to bring in a person to help manage your many properties.
- So, before you decide one way or the other on weather or not you’re going to bring in outside help. You should really ask yourself a few different questions. For example, “How detail oriented are you?” “How quickly do you respond to your tenants” “Are you familiar with multifamily leasing technology and how it works?” “How quickly are you filling empty units?” “How far do you have to travel to get to your units?” “Do you even have a budget for a property manager?” All of these questions, and few more should be answered before you bring someone else on board to help you manage your properties.
As we said in the beginning, only you can truly decide if bringing in a property manager is the right move for you. You just need to be able to fully look at your situation and be realistic in your decision making process. Regardless of what you decide though, you just need to be comfortable and confident in your decision. If you are, then it will help put you on a path to further success in the real estate industry!