What does a real estate property manager do? What do they actually do
day in and day out that makes your job as an owner that much easier? Let's go.
As a real estate investor that invests all over the country and works with multiple property
managers, what I want to do in this video is give you the 5 things you need to know
that all property managers should be doing. So, if you interview a property manager and they're not
doing one of these 5 things, you need to move on and get a new one. But make sure you stick around
to the end because at the end, I'm gonna tell you the biggest mistake I ever made in real estate
when it came to property management and it cost me thousands and thousands of dollars. The first thing
a property management does is they collect rent. That's very basic, it's one of the most
basic things property managers do is they collect rent and they deal with delinquency rent. Meaning,
renters that aren't paying or haven't paid yet. One of the biggest things a property manager does is
making sure all of the money of your portfolio is collected into one place so that you don't have
tenants that aren't paying and are still living in your house for free. One thing property managers
often won't do is to help tenants get assistance. What I've done with all of our property managers
is we now help our tenants get assistance if they can't pay. What this has really done is if one of
our tenants have lost a job or they've hit a tough spot and they don't have the revenue to pay rent,
we actually assist in the process of helping them get the assistance so they can pay rent.
A lot of property managers don't think about doing that but I would tell you as you interview
property managers, make sure they're able to help people get assistance when they need it. This will
make your rent delinquency go down exponentially because if somebody's hit a tough time and they
can't pay you now are offering a real solution. You're not just calling trying to get money out
of them that they don't have, you're calling and saying, "Let me help you get the assistance you need
so that you can pay your rent so your credit doesn't take a hit and we don't have to evict you."
It's a win-win and by bringing that process in-house, we've been able to help a lot of
tenants stay in our units, continue to pay and help them get back on their feet rather than just
kicking them out. So, one of the keys to a property manager is they collect rent and make sure that
people that aren't paying rent are on some sort of program to either move out or to find a way
to grab that money. And by creating an assistance program, you're going to have a lot more people
pay and a lot less delinquency. The 2nd thing a property manager does is they turn over your
units. What this means is when one of your tenants moves out, they make sure that unit is rent ready.
What that means is ready to rent to another tenant. So, when a tenant moves out, a lot of things need to
happen. Number 1, the utilities need to come back into our name so we can cover those bills until
another tenant is in. Another thing a turnover includes is to clean the unit and make sure it's
ready for the next tenant. We also will do repairs in order to prepare for another tenant. For example,
let's say the last tenant was a little hard on the carpet and it needs a new paint job, we want to put
in new flooring and update the unit to make sure not only that we can get higher rent, but it's also
ready and safe for another tenant. But the other thing they do is they market your unit. Once it
is rent ready, they also put it on marketing site so people can find their unit. A lot of
property managers have a really good website where tenants can come and they can thumb through the
units that are open on their actual website. But they take care of the marketing for you to get as
many applications in so we can find a really good tenant for your property. And as those applications
come in, they're going to show that unit. People want to come and see the unit, walk through, see
the size bedrooms, see the kitchen, see everything the unit has to offer and a property manager will
manage that process of meeting with potential tenants and allowing them to see the property.
In the turnover process, as applications are coming in and they're collecting all those application,
they're also going to do background checks on any tenants that are really good candidates. So, if we
find a good tenant that's a good candidate, our property manager is going to do background checks
and make sure there's nothing in their background that would make them an undesirable tenant for our
property. But then, one of the most important things in the turnover process is they're actually going
to tenant select. Meaning, they're going to actually select the tenant that's going to live in your
place. In all this process of a turnover, they're going to take a unit when a tenant moves out
and bring it to the point where a new tenant moves in and that is much more nuanced to it than just
simply marketing and getting a new tenant. There's a lot of things we need to do to make sure that's
ready for a new family to occupy that unit. And the beauty of that is the property manager does it all.
The 3rd thing a property manager will do for you is they manage all of the repair.
I don't care what kind of unit you own and how new it is, you're going to have repairs.
Furnaces are going to break, roofs are going to leak, a window might crack, flooring needs
to be repaired, painting needs to be repaired, a leaky faucet and they're going to manage
all of those things. My property manager has a system that lets me know anytime a repair request
is put into them. So, if a tenant reaches out and say, "Hey, I have a leaky faucet," they actually have
an automated system that sends me an email that says, "Tenant number xyz at this address told us
that they have a leaky faucet. We're headed out to look at it, we'll let you know the cost of repair."
And all of that's not an automated system so I get updated every time they're at a property.
This is the benefit of property management. They do all of the hard work and we get to continue to
reap the benefit. It's a win-win. They're building their business and we're actually getting to buy
real estate not just acquire revenue, but acquire freedom. Before I go on to the last tips and the
bonus story, make sure you subscribe to the channel and hit that bell notification so you get notified
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The 4th thing a property manager does is they pay all of your bills. They make sure the utilities
are paid, they make sure the mortgage is paid, they make sure the insurance is paid, they can pay every
single bill that has to do with the property. As a side note, this is why it's really important
you pick a property manager of high integrity or request a referral to make sure you have a really
good manager in place because they have access to all your money and all your bills. They can
really hurt your credit or continue to build and strengthen your credit depending on their system
to make sure no bills are lost, nothing goes unpaid and all of your money gets to the right place.
They also make sure all of your taxes are taken care of. Anytime a tax bill comes in, our property
managers make sure those are paid. Anytime a contractor sends a bill to us, they make sure that
gets paid. They make sure all of your bills get paid and then simply transfer your profit to you
every single month. It literally is they are doing the work and they transfer your profit to you. Some
months your profit may go down as repairs go up, but they're going to send that one amount to you
every single month. This makes ownership easy because what I do with my private investors,
sometimes I have investors in my deals, I get one report a month that tells me all the expenses and
the income, I send that report to our investors and everybody's kept abreast of what's going on. This
is the power of having a really good manager in place. They pay all the bills, you get one report of
all the expenses and income of that month and at the end of the year, you have 12 reports and then
you usually get a yearly report of all the bills they've paid, all the money they've collected. It's
a powerful way to manage your properties so you don't have to do the work. But the most important
thing a property manager does is they free up your time. I didn't get into real estate to have another
job. I got into real estate to create wealth, freedom and value. Wealth for me and my generations
to come, freedom for myself and those involved and value to my tenants, managers and the people that
work on our properties. So, the truth of the matter is I didn't get into real estate to have another job
and I'm assuming you're not either. A property manager can do all of the hard work of ownership
so that you can actually feel the value of ownership and you can continue to focus
on further acquisitions. Now, I can tell you, when I first started my properties, I made a big mistake. I
self-managed my properties. That means every time a toilet was broken or a door needed to be repaired,
I was the one that was called, not a manager. There is no freedom in that model so let me please ask
you, do not self-manage your properties if you want freedom. One of the biggest mindsets I had to break
through is I never buy a property that doesn't have enough room in the revenue to hire a manager
or else with the purchase of that property, I sacrifice my freedom. And I also realized
every time I went to fix a toilet or fix a door or fix a window or to turn over a unit,
that was time I wasn't spent on further acquiring more properties and every time you spend managing
your own properties, that's opportunities you're missing that are still in the market right now and
I don't want to see you miss those opportunities so don't manage your properties. Let managers
that do that professionally do what they do and you focus on further acquisitions. The biggest
mistake I ever made in real estate was hiring the wrong property manager. I hired a property manager
that actually didn't even live in the city where my properties were. Yes, you heard that right. Now,
you might be asking, "Mike, how in the world did you make that mistake?" Believe me, it wasn't on
purpose. So, I went to Google, I googled a bunch of property managers, I called them up, one of
them called me back, I started to talk with her, she gave me a resume, she seemed very legit, she had a
office in that city where I owned properties so I never thought to ask, "Do you actually live there?"
Crazy me to find out she doesn't even live in the area. Her team was managing my properties and
poorly at that and she never even lived there. She never saw my properties, she didn't even know what
they looked like. What that ended up producing was a horrible experience. Not only was she not able to
manage her team well, all of the repairs on my properties had to be redone. We eventually had
to just rip those properties from her and put it under a new management company and break contract.
It cost us thousands of dollars. She held about 15 to $20,000 hostage of
our money, meaning she had our rent and wouldn't release it and it took us months to get her to
release at least some of it and we never got all of it. The truth of the matter is hiring a bad
manager can torpedo your success like that. Make sure as your interviewing managers, you go through
this sheet, make sure this is what they're doing, oh, and as a side note, make sure they live there.
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