While some individual investors can be tempted to try and manage their own investments, savvy investors know that professional third-party property management is really the only choice.
Many individual investors are currently looking to step up to multifamily real estate investing. That can range from small 2-4 unit properties to entire apartment buildings, mixed-use properties and complexes with multiple towers. However, even at the single-family rental home level professional third-party property management just makes more sense.
You may be inspired by TV to renovate or be a vacation rental host, yet, those hobbies may be best left to your personal use properties. For those who are serious about real estate as an investment, for profit and for wealth building and creating a legacy, self-management is just too risky.
Tenant Interaction Risks
One of the biggest and most obvious risks to landlords comes from interacting directly with renters. At least it should be obvious. If you are not on top of legal changes and precedents in landlord-tenant law on a daily basis, it can quickly become a legal minefield. Knocking on the door one too many times can lead to harassment lawsuits. As can failing to deliver the right notices at the right time. There can be discrimination issues in marketing and denying renter applicants. Not to mention it only takes one false accusation from a tenant about your behavior on the property to end up in hot water. With all these risks, it is far smarter to have a third property asset manager be your legal buffer.
No matter how intelligent and successful you are in life, managing multifamily investments well requires years of mastering many different factors. It takes a whole team of experts to do well. If you aren’t maximizing performance on a daily basis, you are losing money. No CEO out there would be able to keep their job long if they weren’t getting the most out of the company. So, why settle for less than your assets can deliver?
Optimizing performance today includes leasing strategy, tenant screening, tenant mix, maximizing occupancy, providing epic customer service, handling online reviews, and much more.
The Value of Property Management Companies
In addition to all of the above, professional property management companies bring a whole team of pros to your aid. That includes legal, accounting, maintenance, marketing and more. Typically for one low service fee. It’s virtually impossible to hire all of those people on your own and manage them for anywhere near those rates.
That’s in addition to the value found in vendor pricing and relationships. These companies have a lot of negotiating power and sway with vendors for maintenance, repairs, and financing, that can bring a lot of savings that would otherwise be inaccessible.
Investing in Line with Your Goals
Perhaps most important is that you are investing in line with your goals. Remember what you really want from investing in real estate. Is it just a fun hobby? Or is it truly passive income, time freedom, safety, and asset protection and wealth building? What asset management approach is going to best deliver on that?
ABOUT THE AUTHOR
Bill Zahller is the President of Park Capital Properties and resides in Asheville, NC. As a Multifamily Real Estate Investor and Syndicator, he founded Park Capital Properties in 2016 after 14 years involvement in real estate investment. He works with accredited investors and professionals who are interested in real estate investment, diversification, and financial freedom.
Bill has been flying since high school. His father was a Naval Aviator and Captain for TWA. Bill has been flying professionally for over 25 years, 23 of those at his current company. He has accumulated over 12,000 hours and 7 Jet type ratings. He has also held Instructor, IOE Instructor and NRFO pilot positions with a large fractional flight company. He is currently flying the Global 6000 in a long range mission capacity. This keeps it interesting – one week its Beijing or Sydney; the next Rio or Rome.
Bill is also the founder of the Asheville Multifamily Investor Club. Visit www.ParkCapitalProperties.com for more information.