First Time Landlords | Using SRI 1008 SATYAATMATEERTHA SWAMIJI s 23 rd chaturmaasya 6 days ago   20:21

Share
Rules For Rebels
Last night I was doing my taxes and as I was going over my rental income and expenses I was really surprised to see how much money I spent on property management fees as well as repairs.

I just finished my first year of working with a property manager. Previously I had been managing my own rental for the prior 3-4 years. It was my first time as a landlord, and I think I kind of lucked out getting good tenants who paid rent on time, took care of the house, and even did some upgrades at their own expense and with m permission.

The second time around I was having more trouble renting it. I was getting all Section 8 Tenants. You hear nightmares about Section 8, and I hate the Government intruding in my life in any way and the State Government is an absolute nightmare so I figured if I was goign to do Section 8 I didn't want the hassle of dealing with it myself and decided to hire a property manager.

They charged me $250 for a tenant finder fee which I found to be pretty reasonable since many property managers charge 1 Month rent which in my case would have been $1400.

They also charge me 10% of the rent each month which is pretty standard among property management companies and comes in at $140 per month. When handling the rental myself I didn't bother getting a license from the City, who are they to tell me what to do with my property and extort $100 out of me, however using a property management company they do it by the book and that cost me an extra $100. I also had to do some improvements such as putting in a garage door opener even though I lived there for years without one so some extra little stuff like that cost me a few hundred extra as well.

I was kind of surprised how much I paid this year in repairs and management fees. The repairs couldn't have been avoided, I had one fluke incident of vandalism where someone busted out all my downstairs windows and sliding glass door. I also had a pipe explode, a tree that needed to be taken out, and a toilet valve repair. That stuff just comes with the territory and came to a little over $2,000.

The management fees which includes the tenant finding fee, lease renewal, monthly management fees, and repair costs which they charge me 10% of repairs to oversee them came to almost $2200. That is money that I could pocket, if I was willing to take tenant calls, collect rent on my own and oversee repairs myself.

When using a property manager and things are running smoothly it feels like your throwing away money because your paying 10% for them to do nothing more than collect a check. When things aren't going smooth however whether it be a tenant not paying rent or repairs or accidents, they will file a 5 day eviction notice with the court, they will handle repairs, basically it takes a lot of work off you and you won't be fielding repair calls at 2am on a Holiday.

All in all if I had to do it over again I think I would use a property manager despite the fees and costs. While I'd love to have that extra $2,000 each year in my pocket, I like the idea of my investment rental property being completely passive and I'm willing to pay for it. It also helps that I have a nice margin on my property which allows me to sustain these costs.

I'm not a real estate expert, I've been a landlord for about 6 years and currently only have one rental property although I am looking to expand into more and develope a portfolio of rental properties. I'm curious to hear your guys experiences. Do you have a rental property or are you a landlord? Do you self manage your property or do you use a property manager? What has your experience been?

Comments 19 Comments

Chris R
Making money off people living. Ahh the American dream.
BashLion
how much do you profit from amazon monthly??
Dan Baxter
Loved the video. Getting ready to buy a house and intend to have an income suite on it to help pay for the mortgage.
MsY1080
Been lucky with 2 tenants over the last 4-5 years. Introduced through a real estate agent do everything my self but really haven't had to do anything. I was thinking of switching to a property manager but if the expenses are similar that's really cutting away alot of profit end of the year.
vinnyisntgud
I remember way back when you had like 2k subs and you said "my goal is to hit 100k", your almost there holy shit
Beezy Talking Shit
Good move on not doing section 8! Them people don't give a fuck about your house. They will smoke in your house even though it's against the rules. Fuck your shit up. Headache.
Div.Raheem
Check Out "Biggerpockets" For the best real estate content. No sponsor
Mark Vidales
Property managers have no risk, if people dont pay they evict them, here in Ca. if a tenant knows the law it can be a nightmare as Ca. tenants have all the rights, if a tenant calls for repair the Management Co. sends someone out to fix it and bills you for it many times very expensive, if you dont know how to do repairs yourself, at least minor ones get ready to have it hit your net cash flow, I personally have owned many properties and a small mobile home park and nothing beats managing yourself as it doesnt take that much time if you do it right, unless you get the property at such a bargain your cashflow more than covers a prop management co. Section 8 sucks yes you get over market rent but you end up paying for it in the end most of the time
Murraay Murraay
Hey man, I followed you for crypto and I'm really happy to see you covering landlordship. I'm a graduating college student with sub 2k in savings and equity, and I'm wondering how much I have to save before I start investing in property. 10k? 15? I'll be staying at home with my parents post graduation so my cost of living will be low, but they're gonna squeeze me for money and employment isn't a guarantee. Is it more than foolish to buy property at the soonest opportunity for the cheapest cost?
Add Reply

SRI 1008 SATYAATMATEERTHA SWAMIJI s 23 rd chaturmaasya First Time Landlords | Using 6 days ago   00:00

Share