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| my very first investment property |
I remember beginning real estate investing
with no knowledge of what I was doing at all. The first thing I did was hiring
a property manager to take care of my properties. This may have been the wisest
decision I took at the time.
To me, hiring a property manager didn’t
mean laying back and getting my income at the end of each month. I felt that I
had neither time nor energy to be running after tenants, fixing stoves, dealing
with the tenants’ minor issues, etc. I wanted to have someone who makes a
living from taking care of tenants. I had a full time job and it sure took a
good 70% of my time. Then came promotions, followed with HR managerial tasks,
added responsibility and compulsory travel. Apart from the fact that I’m a firm
believer in specialization, I had limited time to squeeze in real estate
management in that equation.
Getting a skilled and well experienced manager
who specializes in the area is an investment in itself. My property manager was/
is not that efficient though. Nothing is ever urgent to him. You may wonder why
I keep him. What comes to my mind is honesty and lack of greed. This industry
is full of “skelms”.
Reasons for my property manager’s
inefficiency, in my opinion, vary from the long term nature of our
relationship. People get to the comfort zone when they have had the same
client/job for a long time. We have a long term client-service provider
relationship. He has no insecurities. He expects me to hang around forever. I
like my manager and I would hate starting with a new greedy property manager. I
sometimes email him more than once on one small issue. But I guess, I ‘m more
comfortable with that than a new dishonest guy.
He also charges me 7% of rentals or less
instead of the 10% norm. This is also due to the great relationship we have
built over the years. I appreciate this discounted commission, but I prefer to
pay more for great service. Who knows if paying more will get me better service
in my case though. Estate agents are not always trust worthy.
The properties that he works with are in
the lower cost part of the city. I think agents tend to treat tenants according
to the area they live in. Reasons being that most also don’t necessarily treat
the space they occupy with dignity. They even overcrowd the place if they can
get away with that.
Three years ago, I started managing a three
of my properties. I realized how hectic property management is. As it is, real
estate investing and my online business are more than a full time job. Adding
management responsibilities to that was pushing it. In that two and half years
I dealt with complaints about noise, then tenant's children playing with stones and breaking windows, then evicting tenants in my townhouse, then vacancies and late rental payments, and the list goes on. These issues put things into perspective for me. I choose to be a property investor and not a property manager. I hate dealing with small issues and I think hiring a manager is worth the few thousands of rands I part with.
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