When To Hire A Property Manager

Erwin  

Greetings real estate investors!

Erwin  

This is Erwin Szeto bringing you the truth about real estate. And I got a question from the social internets. I get these questions time to time. I don’t mind them, I feel this is one way I can give back to the community that’s meant so much to me. And it’s let Cherry and I to each build a seven figure real estate business, hers mine in real estate. You know, I have a practice of six Realtors now. And Cherry obviously has an accounting business that lottery focuses on real estate investors and realtors. It is called Real Estate Tax Tips for a reason. And aside from that, we also own a bigger real estate portfolio. My real estate business that iWIN real estate transacts on over 100 properties per year; 90% of those are for investment purposes. And if you know us, we’re very close with our clients. Since we as we provide coaching services to ensure their success. The point I’m trying to make is we’re we have our fingers on the pulse of the real estate stuffs. Investing personally, I’ve had my personal interest in over 40 plus properties since 2005. So while I don’t know everything I know a little enough to be dangerous and happy to share my experience in case that helps anyone out there. 

Erwin  

This week we have Duncan who asks, When in your real estate journey did you decide to engage a property manager to be able to focus on other aspects of business and investing? 

Erwin  

So my answer is long. This is a podcast it’s a bit longer format, which hopefully you will allow. This won’t be the hour long format interviews that don’t really do this only took a couple minutes. So let’s start off. 

Erwin  

So early days 2005. Because he asked about my experience. My experience is back in 2005. We self managed, my now ex wife was our point person, her and her family owned a home renovation company and we had us not a big portfolio, we grew to five investment properties. But they all happen to be very close to where the rental company was situated in the suburb of Hamilton. So property management was done all in-house. Because again, proximity was close. We had the skill sets all in-house. And because we could do it all in house, it was cheaper than going external. As I worked downtown Toronto at the time, and based on my own skill set. So I’m naturally analytical. And I enjoy geeking out on learning about the business of real estate economics, those sorts of things. So I do all the virtual work. So, for example, I would do all the financial analysis of properties, I would rate rental ads, I’d help craft offers, I should know I did most of the work for crafting the offer. Because our realtor at the time did not understand investing. So I had to write the offers in terms of getting terms that were favourable to an investor. Again, I would review tenant applications and of course, credit checks. Because back then like like we’re talking, you know, mid late 2000 credit checks for like the old way. So it’s all codes. It’s not it’s not easy, like it is today, where things are coded colour coded, you’re given just a number, which makes things really easy. And then after my divorce, which was around 2010 ish, somewhere around there, apologies. I have my own personal great reset and my real estate portfolio. And so I no longer had all those resources available to me in terms of skills and skills and resources. So I immediately hired outside help to maintain properties and to have boots on ground. For example, one of the first properties I bought during my own recruit reset, I just stopped using great reset, and the reset of my portfolio was in St. Catharines. And at the time I was living in Hamilton. So that’s an over half an hour drive. So to me, that’s a little on the far side. So what I did was I was referred to handyman, who was a very, very good handyman. He did many things, contracting for me, and he became my property manager of sorts. We paid a monthly retainer to a property management fee. Not too much. It was under $200 a month to maintain the property and to provide customer service to our tenants. Cherry and I based on our strengths we found that our our handyman wasn’t qualified, nor did he have the skillset to do the right ads and tenant screening stuff like that. So we still did that. Mainly me because that’s what I was good at. And Cherry would deal with the rent collection issues.

Erwin  

My clients who have the time skill they do self manage. Understand that they do Have a time as in one of the so often my clients are married couples. So 1 of the one of the partners in that relationship doesn’t have a full time job. So that’s why they would have time. And they just haven’t behind us paying the people as well. So they so that’s the profile my clients who self manage, who still self manage, after like 5, 10 years, but they are the minority among my clientele. So that’s not not even 10% of our clientele, the rest of them, about 90% of them use full service property management. And don’t just use any property manager. They will they generally take our referrals, we let them know who that we use personally. And those property managers in my opinion, are the best in that operate in our cities that we operate. In before anyone asks Are Niagara in health and property managers operate on a referral basis only. And they’ve actually specifically requested to only work with our investor clients, folks who invest the right way. Not slumlords far from solid words to people. If you need Kitchener or Waterloo referrals, no problem, happy to recommend you to Diane de Dominica. It’s not the easiest to be a property manager and either a couple have recently closed the doors. I know a couple who have sold off over the years. And then just recently, one property manager and Barry closed the doors. And I’m Kitchener, who was just on the show, closed his doors, and another property manager in Kitchener Waterloo, Cambridge, I’ve personally hired and fired over four, four or five property managers over my career. And that’s just in Hamilton. So it’s not easy. And before you invest in any city, make sure there’s at least three high quality property managers, that’s this is my own opinion, in my experience, I wouldn’t invest in the city unless there’s at least three quality property managers, that would be happy using because again, in my experience, you’re not going to stay with all of them. Back in the again, he asked some more questions, he’s worried about cost overruns, as a part. So again, from my experience as a professional real estate investor, and my ex, you know, I wasn’t like I’m an ex owner, somewhat, you know, again, my ex wife owned a renovation company. And so we did lots of significant renovations to our properties at a very high standard. So I know renovations quite well, and what they cost because I’m in the busines. A good property manager will save you time and money. Mark, the property manager I use they have internal staff internally that are on salary. So they’re handyman stuff. The turnaround time is fast. And it’s often cheaper because again, their salary people and often these are not licenced professionals. For example, if I have a leaky tap, I don’t need to send a licenced plumber for that a handyman can often deal with that for a fraction of that cost. So again, I’m going to save on time and money. And simplicity as well, in terms of booking someone to go fix stuffs my attack from my tenants. So then everyone’s happier, right? No one, I think everyone wants repairs done sooner than later. To save all time, all parties involved included. So that’s myself a tenant in my property manager, I’ve instructed my property managers if the cost is under $300, it makes the tenant happy and to go ahead and do it. This saves me from having to be a bottleneck to approve really minor things such as pest control, or a gas leak. Another business outliner but it’s it’s an odd thing to have to be to have to authorise dealing with a gas leak, broken door locks, types, those types of service requests. I tell my PM,  property manager, in no world can I say no to these requests. And if I did, I would expect to be fired as our client. We’ve literally received a rule a couple of years ago, was on a Monday that our property our sorry, our handyman/property manager, which he texted us, called there was a mice problem at x property and asked me to buy property on the weekend. But I took care of them. Right? That’s so he took care of them without asking us, which is what I expected. He told me on Monday that everything’s taken care of. Isn’t that perfect? To me, these are provide providing basic services to one’s tenants. It does take time and money. So you can choose to do these things yourself. I choose not to because my weekends are packed with kids stuff. So I don’t have the time to deal with these low paying tasks that I don’t generally have skills for, you know, I can pay between 20 to $80 an hour for these types of tasks to deal with. And again, I don’t have the skills to deal with these problems.

Erwin  

So I hope that helps. I hope that helps Duncan and a couple others of you out there. If you enjoyed this episode, kindly leave me a review stating so. And I’ll keep doing these episodes because between in between our regular weekly interviews, because this is a bit of work for me to do, I don’t mind answering questions. But it’s not a value that No, I’m not gonna do it. But if it isn’t value, then let me know, right? Drop me a review on Spotify or iTunes, or even shoot me a DM on any social media platform. Alright, so next time, hard assets for the win. 

Erwin  

Thank you for watching. If you want to learn how to invest in real estate from scratch, my team teaches beginners how to use the number one investment strategy that I personally use in a virtual free trading class every month, go to investor training.ca/youtube To register for our next class. That link is also in the description as well. I publish at least two to three videos a week here. So subscribe if you want to keep learning from seasoned investors like myself, my guests, And if you’re just starting out, feel free to ask questions in a comment below. And I do my best to answer each of those comments and questions myself. Again if you’re ready to learn the nitty-gritty about real estate investing from a professional investor register for our next virtual class at that investor training.ca/youtube Thanks again for watching. See you in the next video.