I sat down with a very nice retired man the other day to discuss his eleven rental properties that he manages himself. A fellow realtor was trying to convince the man that he shouldn’t be managing his own rental properties because it was costing him money. And after hearing all the facts, the realtor was correct. This man was costing himself a considerable amount of money by not letting myself or another property manager manage his rentals.
You see, he has a tenant who has only been partially paying for the last year. I said year! When I learned additional facts about the story I knew that the situation was even worse, but I won’t go in to those here. But suffice it to say the tenant was short paying by about $400/mo leaving a deficit of about $4,900 for the last year.
Then there was the additional tenant staying in the home causing damage. Then there was another of his eleven properties that had pets that he didn’t initially know about. And he has two vacancies. So, essentially, he has 4 properties under-performing.
Now, one vacancy out of 11 isn’t too bad, normally. But both of these vacancies have been for many months. And now it’s mid-November.
His chief objection was that a property manager costs him money. And he’s right. But as near as I can tell, he’s losing about $3,150/mo not using a property manager. My cost would be somewhere around $780/mo to manage those 11 properties. Throw in some leasing fees and you might be up to $1,100/mo. Might. But he’d still be in the black by about 2K a month on his rental properties.
So is property management costing him money? I’d say “no”. But, I was unable to convince him of the value of my services. He’s concerned about the monthly fee and being nice to his tenants, the same tenants who are breaking his leases and abusing his demeanor. I wish him the best.