Our experience has shown us that real estate investing is a TEAM sport.
Everyone on the team is important … but there is an MVP.
When it comes to property investing, your property manager has the most important job. Sadly, we see too many investors fail to focus on recruiting top talent and utilizing this valuable position to its fullest.
Today we’re sharing why property managers are so important with a top industry insider.
In this episode of The Real Estate Guys™ show, hear from:
- Your most important host, Robert Helms
- His managing-to-hold-it-together co-host, Russell Gray
- 2021 President of the National Association of Residential Property Managers, Scott Abernathy
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Property managers make the real estate business work
We thought we would start out 2021 by talking about one of the most important topics there is … property management.
That might not be what you were expecting us to say … but here’s the deal.
You can own a property, but unless you get a great property manager … it’s not going to turn out like you expected.
A property manager is the one who has to make the rubber meet the road.
We love real estate brokers. We love lenders. We need all those folks at Title and Escrow and the attorneys and the inspectors that help get us into a property.
But at the end of the day … it’s the property manager that makes the real estate business work.
Choose your manager wisely
When you go to invest money in Wall Street, you look at the resume of the money manager … Who’s the hedge fund manager? Who’s the mutual fund manager? Who’s the investment strategist?
When you flip that over to the real estate side, the person you should be thinking about is the property manager and their team.
When people say to us, “I tried real estate, and it didn’t work,” or “I have this terrible property,” 9 times out of 10 the issue is with management.
Some investors prefer to manage their own properties. This strategy may work for some … but it doesn’t work long term. As your portfolio grows … it becomes impossible to do everything yourself.
Property management is NOT where you want to take a shortcut. You don’t want to pick a manager based on price … you wouldn’t pick your brain surgeon that way, would you?
We have a philosophy … when you find a great property manager, you build a portfolio around them. After all, they’re the ones that make it happen.
What makes a good property manager?
One thing to keep in mind is that most property managers are very local. They have a single office and work in one town. There are a few national property management companies … but they are the exception to the rule.
One of the resources we have appreciated for many years in the National Association of Residential Property Managers (NARPM®️).
Scott Abernathy is the incoming president of NARPM®️. He had an interest in real estate from a very young age and fell in love with property management while managing his first triplex.
We asked Scott why … in his opinion … investors should invest time to get a great property manager.
“There are a lot of good property managers out there, and there are a lot of bad ones out there as well. Doing your homework to find a good property manager is vitally important,” Scott says.
Landlording is not a real estate business. It’s a people business. You have to keep people in properties, or you won’t be successful.
You need a property manager that can deal with people and roll with the inevitable punches.
“I heard somebody say that your property manager is like the referee of a boxing match where they are the only one who gets hit,” Scott says.
One of the benefits of having a property manager is that they are not attached to the property like the owner/investor may be. They are a neutral third party, working on your behalf with your best interest in mind.
“I don’t even manage my own properties, “ Scott says. “I think everybody needs that emotional barrier between themselves and their property.
It’s also EXTREMELY important for a property manager to understand the local, state, and national laws where they work.
“It is more important than you can possibly imagine, especially right now as these local, state, and national laws and regulations are changing by the second,” Scott says.
For example … due to the COVID-19 pandemic … the state of Washington has a moratorium on evictions through the end of 2021. The state of Georgia on the other hand is wide open.
A property manager’s ongoing education is also crucial to their success. Find a property manager who is always learning.
“Property management is the most litigious part of the real estate industry, and I believe the biggest reason for that is the lack of education,” Scott says.
On a personal level … property managers need to be great on the front-end … friendly, empathetic, and understanding as people move in … and firm and fair when issues arise.
“The property management business is a conflict business. You frequently have one side who doesn’t want to spend money unnecessarily and another side that wants something fixed, and they want it fixed now,” Scott says.
Like every investor … every property manager has their own philosophy. Find a manager whose philosophy exists in harmony with yours.
For more on property management … listen in to the full episode!
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