Management is a beast.
It’s the bane of an investors existence.
I mean, no one is going to do it as well as you’d do it yourself… right?
Management is probably the most important piece to get right when it comes to investing. The right manager can take an average deal and make it perform well. The wrong manager can sink a great investment in fees and negligence.
Property management is taking all the tough parts of investing and doing them well. PLUS they’re managing their own books, staff, retention, and growth projections. The cherry on top of the whole damn thing is that the margins in it are pretty terrible.
Communication is tough.
Reporting is tough.
Attracting the right tenants is tough.
Protecting the bottom line is tough.
We partner with another company to handle management. They’re great. We believe in their business. Yet, even with the best manager you need to pay attention.
Investors seem to forget that.
The main point we drive home is this: there is no such thing as a real estate investment you don’t have to pay attention to. It just doesn’t exist. Not unless you build the management team to handle things exactly how you want them to. And even then…
Management is as much about the relationship you build with the manager as the asset you own.
Management is subjective. There isn’t a one size fits all approach, and often the answer to problems isn’t obvious. The more you and your manager know each other, and understand each other’s nuanced decision making patterns the more likely your portfolio will perform the way you want it to.
Don’t miss that last sentence- it’s important. This is your investment, and you need it to perform how you’d like it to. Some investors want to fix every single thing and be proactive about handling things that aren’t even a problem yet. Other investors want to scrape by with the bare minimum and do a bunch of “band aid” fixes.
Neither is wrong. Neither is right. Understand this and get to know your management team. Allow them to get to know you.
If you don’t really have a strategy, don’t have an end game, and generally don’t care about how the property performs, then sure! Allow the management team to handle things as they see fit. But expecting your management team to hit goals that they don’t even realize exist is unreasonable.
If you do have a strategy, pay attention to that strategy and treat your manager like a partner in your business/portfolio.