One Person Business videos have been increasingly popular on YouTube. It sounds great to have help, but some people are not at the stage in their income property business that they have help or can afford it. However, anyone can self manage a pretty modest portfolio.
On my own I managed around 140 units- commercial and residential, while I was also working full time at a law firm. That is not ideal or sustainable, but it goes to show it is possible. Everyone is different, so definitely be realistic with yourself.
My rule of thumb- one person can manage about 150-200 rent controlled units at a time. In this case, you are your management company. If you are starting out with a duplex, triplex, or a small apartment building you can manage it yourself part time.
Don't underestimate real estate. Yes, it's passive in name but not always in application. If you want it to perform well it does take active work, especially now with the ongoing rental law changes nationwide.
If you are a one-person property manager her are 3 tips that will help you get a grasp on your portfolio.
Get Property Management Software
This is by far the most overlooked component. I have clients that still manage large apartment buildings with ledgers on yellow legal pads. Does it work? I mean, possibly. Does it make sense? Um- no. While we all fear an iRobot-esque outcome with AI, in the meantime, technology has advanced to the point software interfaces are actually pretty easy to understand. There are several options out there such as Appfolio and Yardi.
I have personally used Appfolio and I think it is great. They have a lot of features such as customizable reports, rent screening, website hosting, rent payment processing, accounting, reconciliation, bill payment (including printing checks directly from the software), email, text messages, tenant renter insurance integration, maintenance tracking and so on. If you don't have PM software it is definitely worth looking into. There are other companies like Yardi and PropertyWare, but a quick google search will reveal the different software options. Many also have free demos.
Software is of great help in accounting. Year end you pop out a profit and loss statement for your CPA with little hassle. I also have used it to send alerts to tenants such as requests for update insurance policy info and notices about upcoming work. It is also very helpful for tracking maintenance requests, from the initial request, assigning it to a vendor, uploading photos of before and after, receipts, and tenant bill back if the repairs are the responsibility of the tenant.
Most software comes with training modules and tech support to help you implement their features.
Join a Local Association
If you are in California then you are aware of the near weekly change in laws around providing rental housing. You can get informed a few different ways- Google Alerts that pool together daily news articles for key words, ie. Los Angeles City Council, Los Angeles Housing Laws, etc, reading the news, and keeping tabs on your representatives/ law makers.
Joining a real estate related association also helps. There are several of them that usually cover a certain area of the state, or even are national. Local associations tend to give members updates on laws, potential laws, forms, meet ups, and vendor lists. Vendor lists especially help smaller or new landlords who do not know any vendors locally.
Get a Good Lease
This one is of particular importance. A landlord needs a good lease and a good system to enforce the lease. I will save my speech for lease enforcement to another newsletter, but definitely have a good lease and get it reviewed by a lawyer. I hear landlords tell me a tenant is violating the lease and then I read the lease and it does not talk about the conduct. Make the effort to get a good lease template in place so future updates to it will not be too much work.
Struthers Legal has a lease template available for purchase here.
Real estate is not really "passive" anymore. Take the time to get yourself set up with tools that will help you manage. The work upfront will make it easier to maintain down the road.
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The information in this post is for general information purposes only. Nothing on this post should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute, an attorney-client relationship.