Couldn’t handle it...why I just hired a property manager

they wanted to charge me seven dollars to change a lightbulb seven dog that's basically a footlong Subway sandwich straight up for changing a lightbulb so as soon as I saw that I'm like no way am I ever paying seven dollars to change a lightbulb if there's any takeaway from this video you will never what's up you guys it's Graham here so the time has finally come it happened people ask me all the time but what are my thoughts on property managers and I explained that it's pretty easy it's not so hard I spent maybe 1 to 2 hours per month managing my properties and I have five in them I have three houses a duplex and a triplex now since 2011 early 2012 I've handled it all myself from fixing up units to renting them out to managing anything that breaks to just accounting everything was pretty much just me but the time had come and I broke down and hired a property manager so anyway here's the backstory why you would want to manage a rental property yourself why you wouldn't want to manage it yourself and why I ultimately decided to hire a property manager in my experience so far so stay tuned with this one because this will be a great video and as always if you enjoy videos like this just make sure to hit that like button don't forget to do that otherwise you're gonna get League ma so let's start here I ended up buying two houses and a triplex in late 2011 early 2012 now of those two houses were vacant and one of the units and the triplex was vacant so in order to rent them out those units had to first be fixed up and remodeled and then I can get a tenant in there now at the time I really wanted the experience of learning how all of this worked firsthand so I found the contractor myself I pick out a lot of the materials myself I Drive down like every other day just to visit the site and make sure everything was going smoothly and staying on schedule and also staying on budget so about three weeks later all three places were pretty much fixed up and I decided I will just rent them all myself now it was half financial because I just wanted to save the money but I also really just wanted the learning experience and felt that I could do a better job because it's my own place then hiring someone else to do it where maybe they just didn't give it the same attention because they didn't own it they're just as a background here for anyone who's new or just doesn't know I began working as a real estate age when I turned 18 years old and I really began my career by doing leasing so I had some pretty decent knowledge already about California lease agreements photography marketing how to find tenants how to somewhat vet them so I had some basic knowledge on this already now with that in mind I figured why spend $500 and 8% of the gross rents hiring someone else to do it when I could pretty much just do it all myself and this is pretty much what I've already done for a living so I took pictures of the units I put them up on Craigslist and the calls just rolled in I scheduled open houses over the weekend I handed out applications and that was that now besides just one bad experience with this video that I made explaining it all if you guys have not seen that video the link is in the description highly recommend you watch that that's the example of pretty much everything not to do besides that one bad experience all the tenants that I had picked have been amazing no since then managing them have been extremely easy between five tenants it really only took me about an hour maybe sometimes an hour and a half two hours at most per month to manage these properties and tenants most of the time this really just consisted of making sure the rent has been paid cashing checks looking over expenses keeping accounting of everything and if something breaks just hiring the appropriate person to come and fix it it was honestly just a really pleasant experience now if something were to break because keep in mind at the time I was really like 60 to 90 minutes away from these properties depending on traffic and time of day all I would do is simply take the call or email and then do some research and find the appropriate person to go and fix it for instance if there was a plumbing problem I would then go on Yelp find a top-rated plumber on Yelp call them put them in touch with the tenant and they would go out and fix the issue or if there's like a roof problem I will go on Yelp again find a top-rated roofer call that person and just coordinate with them to go out to the property and fix it the contractor would then call me let me know what the issue is how much it's going to take to fix it and if that's ok with me I then pay them and they go and do whatever work they need to and by doing that I could pretty much manage these properties remotely with very minimal effort pretty much no matter where I am whether I'm at an hour away or whether I'm like the country really didn't make any difference whatsoever and honestly it was just really easy work when everything is running smoothly I would rarely ever get any like inconvenient 3 a.m. phone calls or anything unlike Sunday mornings 5:00 a.m. like most of the stuff was fairly minor little like things that needed to be fixed that were done over email and I mean just little tiny things that didn't make much of a difference now my landlord philosophy is this and I might get a lot of hate on this I like it people just like and subscribe just like doesn't get their loading Pilate grantee landlord but this is it this is it I don't raise the rent unless it's a unique situation or just a cash flow issue for instance on my original three properties I have never once raised rent unless the unit becomes vacant at which point I just fix it up and rent it out and whatever its market value is at the time I've had the same tenants since 2011 that are paying the same rent then as they are right now am i leaving money on the table 100% yes I am but on the flip side I have great tenants that always pay the rent on time that fix whatever issues come up that are very easy to deal with then I don't have to worry about any vacancy because they're so happy there and all the tenants I've had since back then just treat the place like it's their own and they're just all-around awesome people so they end up paying less in rent and in return for me I get a very easy tenant that I don't have to worry about so I see that as a win-win scenario and again if the tenant moves out I simply fix up the unit and then re rent it at market price I think this has happened three times total over the last seven years I think it's been almost seven yeah almost seven years it's only happened just a few times and in those scenarios I end up getting market rent which is usually a few hundred ollars more than what the current tenants were paying but then unfortunately I had one place go vacant when a tenant had to relocate for a job so I figured you know what no worries I can do it all myself again I've been doing it before I can do it again if anything breaks I just go to my Yelp people they fix it and honestly it didn't really take much time between working full-time as a real estate agent investing in properties remodeling them and making three youtube videos a week I figured you know what I could handle it all because it didn't take that much time uh yeah I mean that was until recently and I started to think the time it would take me to drive to and from San Bernardino from Los Angeles would take me about an hour hour and a half each way the time it would take to then screen tenants to show tenants to coordinate these fixes to do everything else that comes along with managing a property it just wasn't worth it just spending three hours driving to and from San Bernardino from LA is worth seven hundred and fifty dollars of my lost time that is time I could be spending doing anything else and make more money than what it would cost to hire someone else to do the same thing and then at that point it finally clicked I got to hire a property manager because I can no longer justify doing all of these things myself so I did some research online I found some personal recommendations from people in the area I decided on a company and then I negotiated their price between another competitor of theirs and then we settled on a flat eight percent management fee of gross rent every single month and we signed the contract and that was that so I did it I hired a property manager to manage one of my houses now keep in mind that's only one I still manage the other for myself because they're extremely easy to manage but I've tested it out on this one home that's vacant now I'm sure if I have any other vacancy on anything else I will slowly shift the property manager over to that but at this point I'm testing it out on the first property and these are my experiences so far overall I'd say my experience is pretty Pleasant my biggest problem with the management company is just a few things the first one is the time aspect I like things to be done as soon as possible for instance they took like four days to do the walkthrough on the property and in my mind I'm thinking why wasn't this done the same day or the next morning those four days that they waited to do a walkthrough are four days that I'm not receiving money now when it comes to this I'm extremely impatient and that could be one of my biggest flaws is that I want things done right I want things immediately and that's the way I've always run something if something needs to be done I don't care if it's like 11:00 p.m. at night I will just I want to get it done I do the same thing for clients and I expect the same service in return but when you're dealing with a property management company that's open from like 9 a.m. until 6 p.m. and you try to reach them on all you know off hours you just can't do it that it should it frustrates me because I know I'm available 24/7 and I expect the same thing in return from somebody else which I know is just it's not realistic but the biggest issue with all of this is that any one of my properties that's empty is simply losing money and that is not in my vocabulary I cannot lose money I don't even know what that means losing money what is that I don't do that now my other gripe with the management company was their photography and again this is basically me just being a perfectionist and really having like super high standards that not many people can meet but I am a stickler you guys know this if you watch my earlier real estate agent videos I'm a stickler for good photography I will never accept iPhone pictures ever for taking pictures of a rental property and putting them aligned and sure enough why did I get they took pictures of my place that makes it look like a piece of crap so I was not into this whatsoever especially when I had taken like professional pictures of this place that look amazing so I sent them my pictures to use instead of theirs but just out why they would ever use just crappy pictures to begin with I just don't understand that but again that's just me being like super particular about the way I like things but that that's an easy one you just get good pictures you just get good pictures once and you can use those pictures for years but anyway they use my pictures and within a week we ended up renting it for 15% higher than what I had it rented for previously so that alone pays for the management company a hundred percent and also gives me an extra eight percent every single month in rent and I just realized now there's a third issue I had which was with their repair bills now I'm not a big property manager person I don't know too much about this and I've heard some stories of people online friends and such that have had issues with property managers charging I'll for work that needs to be done and basically inflating whatever repair bills by like 10 to 20 percent because they take that as their management fee well you can't let anything escape by me especially if it's money related I go down line by line and I will nickel and dime like I just expect I will pay a fair price for a fair service there's no way you should overcharge me for something that I shouldn't be overcharged for case in point I looked over my bill and I realized they wanted to charge me seven dollars to change a lightbulb seven dog that's basically a footlong Subway sandwich straight up for changing a lightbulb so as soon as I saw that I am like no way am I ever paying seven dollars to change a lightbulb if there's any takeaway from this video you will never never I forbid you from ever paying seven dollars to change a light bulb No so I'm like dude that's three bucks that's three dollars match for the cost of a light bulb and just simply start unscrewing it screwing it back in it's like three bucks right there so I just went through everything lined by line by line and just really worked out what the item would cost what a reasonable amount to charge for labor is and then I came back with a much lower price that we eventually finalized on and they did the work now right now I'm only a month into it and so far the experience has been fairly positive I would say the best part about it it's just not having the stress or worry and having the mental clarity of really not having to deal with any sort of tenants or repairs or walkthroughs or really anything that goes on with that no I am a little paranoid that a few things might fall through the cracks because I'm not micromanaging it but like that's just something I have to learn to deal with and just be okay with someone else just taking control of it part of this is really just learning to delegate out to other people so I can focus on bigger and better things because again that's one of my issues is that I like to have little micro managerial control over everything that I do and I like to do it all myself because no one could do it as good as I do but again that just takes up so much my time that's probably spent doing something else so I'm learning how to do that for most of you watching I think it is a great experience to learn how to man the properties yourself if you have the time if you can show it if you like learning how to do this stuff if you want the experience I would recommend doing it yourself because when you do it yourself you care about the property like nobody else I just think it's really hard to find someone who has the same level of care as you do simply because it's not theirs it's just mentally they're not gonna take care of it the same way you would because it's yours and you care about it like nobody else so sometimes when you manage the property yourself you tend to do a little bit of a better job in most situations and then by doing that you're better able to hire out somebody to do it because you already know what to look for you already know your expectations and what's realistic and what's not realistic and you're able to better pick the right manager because you've already had all of that experience but if you've already learned those things or you have no desire to do it or you simply just know you wouldn't be doing as good of a job as a professional who does this and keep in mind part of the reason I was able to do this myself was because I was a real estate agent and somewhat knew what to expect I knew the contracts and you really what to do but if you're not that type of person you have no interest in doing that and your time is better spent doing anything else then they do think it makes sense you hire a property manager even though it might cost you anywhere between six to ten percent of gross rent it could just save you a lot of time to go and make up that money just about anywhere else so with this said you guys that's my back story this is why I decided to hire a property manager and a little bit about my thoughts about property managers in general and what might be right or wrong for you so as always thank you so much for watching I really appreciate it if you guys did not hit that like button like I said you might get League mufe you don't do it so make sure to hit that like button also feel free to subscribe if you haven't already I post three videos a week Monday Wednesday Friday 3:30 p.m. Pacific Standard Time so if you want to be a part of that click Subscribe and also hit that notification about so YouTube notifies you anytime I post a video also feel free to add me on snapchat and Instagram I post her pretty much daily so if you want to be a part of it there feel free to add me there and then finally have a private Facebook group in the description for anyone who's interest in real estate real estate agent in real estate investing real estate anything you have any real estate questions or you just you like real estate like I do just add yourself to that Facebook group I think we have now like 7,500 members in that group we're gonna be hitting 10,000 members probably the next month month and a half so it's getting bigger a lot of people like it really supportive community so if you guys want to be a part of it there just add yourself to that thank you again for watching and until next time

Channel: Graham Stephan

Views: 542,242

Keywords: real estate investing, real estate investing strategies, real estate investing 2018, how to invest in real estate, how to invest in real estate for beginners, real estate 101, passive income, passive income ideas, passive income 2018, real estate investing with no money, biggerpockets, landlording 101, how to be a landlord, tenant screening, property management, property manager day in the life, real estate agent, real estate coach, real estate mentor

Id: N-Is3-14HAA

Length: 15min 45sec (945 seconds)

Published: Wed Aug 15 2018